Committees Clear Five KLC Initiatives

Five more KLC initiatives are poised for votes in the House and Senate after a busy noon hearing schedule at the Capitol. On Wednesday, the House Local Government Committee approved two measures while the Senate State and Local Government Committee passed three. The bills address a range of topics important to cities across the commonwealth.

Senator Rick Girdler (R-Somerset) and KLC Director of Public Affairs Bryanna L. Carroll testified in support of Senate Bill 111. The measure addresses local-only tax increment financing (TIF) districts by correcting language inserted in the last days of the 2021 session.

“All this bill does is correct language inadvertently added last year,” Girdler explained. “The Cabinet for Economic Development pointed out the need for this correction. The language created an unfunded mandate for local TIFs.”

Senate Bill 111 solely applies to local-only TIFs and does not impact any situation in which the state participates.

The committee approved the measure as well as Senate Bills 106 and 112.

Senator Wil Schroder (R-Wilder) filed Senate Bill 112. “This bill encourages interlocal agreements by removing the need for repeated filing with the Secretary of State,” Schroder explained. “There is a contradictory provision in the act, and this measure clarifies the original intent of the bill enacted in 2020, which lessened the burden on these essential partnerships.”

Carroll joined Schroder to explain that current law requires every party involved in an agreement between two or more local entities to submit an amended copy of the interlocal agreement to the Secretary of State whenever minor modifications occur, even a simple name change. State law does not require reporting such tweaks to the attorney general or the Department for Local Government (DLG).

“SB 112 will remove a roadblock for local governments as they forge these agreements and put measures in place that benefit their citizens,” Carroll said.

Committee Chair Senator Robby Mills (R-Henderson) filed Senate Bill 106 and testified on the bill that establishes a way to administratively dissolve cities that do not collect funds or have elected officials.

“The need for this legislation became apparent as the distribution of CARES and ARPA funding from the federal government highlighted that several cities have not maintained a government,” said Mills. “In some instances, insurance providers are still collecting an insurance premium tax, even though there is no active government to collect the money.”

Carroll explained that current law requires a resident of a city to file a petition with the Circuit Court to dissolve a city, something that has not happened in several years.

Senate Bill 106 establishes a procedure for DLG to identify inactive cities and remove them from the state’s records.

The House Local Government Committee passed House Bill 351 and House Bill 399.

Carroll and House Bill 351 sponsor Representative Deanna Frazier Gordon (R-Richmond) explained how the bill allows a local government to submit an affidavit when required to provide a state agency lost, damaged, or destroyed records.

“We began working on this bill long before recent events in western Kentucky reminded us of the importance of planning for situations in which vital city records may be lost or damaged,” Frazier Gordon testified. “This legislation puts in place options to replace information when a local government made a good faith effort to replace or re-create a lost, damaged, or destroyed record.”

This measure includes tampered records and those lost through ransomware or cyberattacks. The law does not apply to any records that local governments must file for elections, real property transactions, matters of taxation, or corrections reporting.

Representative Josh Branscum (R-Russell Springs) and Carroll testified on House Bill 399. Branscum introduced the bill to help smaller cities with expanded annual audit exemptions and to provide options for public comment on local government spending priorities.

Currently, the state requires annual audits of cities with no long-term debt that receive or spend less than $75,000. House Bill 399 raises that exemption amount to $150,000.

The bill requires local governments that receive Local Government Economic Assistance (LGEA) Fund grants or municipal road aid (MRA) money to allow public comment at an open meeting instead of holding a special hearing. The local government must provide notice of the meeting.

“City officials tell us that usually no one attends these public hearings. However, citizens often attend their regularly scheduled council or commission meeting,” Branscum explained.

Representative Josh Bray (R-Mount Vernon) voted to approve the measure and called upon his experience in city government to explain his vote. “In my 15-plus years of local government experience, never had a single person shown up for an LGEA or MRA public hearing. So, I vote, ‘Yes.’”

Both measures head to the House of Representatives for consideration.