RELATES TO:
KRS
132.010,
134.590,
157.440,
157.620,
157.621,
160.470,
160.473,
160.476,
160.477
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
156.070 sets forth the State Board for
Elementary and Secondary Education's plenary powers over the management and
control of local school districts.
KRS
156.160 gives the State Board for Elementary
and Secondary Education the authority to promulgate administrative regulations
deemed necessary for the management of the school districts under its control.
This administrative regulation is necessary to provide guidelines for the
calculation of the tax rates certified to the school districts by the
Department of Education.
Section 1.
Definitions.
(1) "Current year total valuation
of adjusted property at full rates" means the prior year assessment of adjusted
property at full rates minus current year homestead exemptions plus current
year net assessment growth all as certified by the Revenue Cabinet.
(2) "Current year total valuation of personal
property" means the sum of tangible personal property, effective public service
company tangible property and distilled spirits property all as certified by
the Revenue Cabinet.
(3) "Current
year total valuation of real property" means real estate plus effective public
service company real estate property minus net new real estate and new
effective public service company real estate property all as certified by the
Revenue Cabinet.
(4) "Effective
public service company property" means assessments which may be adjusted by the
Revenue Cabinet for apportioned property not subject to full
taxation.
(5) "Maximum revenue
collectible" means the prior year's permissive tax revenue plus the levied tax
rates per $100 of assessed value for real and tangible property times the prior
year assessment of real and tangible property as certified by the Revenue
Cabinet and the maximum motor vehicle revenue collectible.
(6) "Maximum motor vehicle revenue
collectible" means seven (7) times the prior year levied motor vehicle tax rate
plus five (5) times the current year levied motor vehicle tax rate divided by
twelve (12) times the prior year assessment of motor vehicles as certified by
the Revenue Cabinet.
(7) "Prior
year adjusted tax base" means the prior year assessment of adjusted property at
full rates minus current year homestead exemptions both as certified by the
Revenue Cabinet.
(8) "Prior year
revenue from real property" means the prior year real estate tax rate levy
times the prior year total valuation of real property as certified by the
Revenue Cabinet.
(9) "Prior year
revenue from personal property" means the prior year personal property tax rate
levy times the prior year total valuation of personal property as certified by
the Revenue Cabinet.
(10) "Prior
year total valuation of personal property" means the sum of prior year tangible
personal property, prior year effective public service company tangible
personal property and prior year distilled spirits property all as certified by
the Revenue Cabinet.
(11) "Prior
year total valuation of real property" means prior year real estate property
plus prior year effective public service company real estate property both as
certified by the Revenue Cabinet.
(12) "Current year projection for permissive
taxes" means prior year permissive tax collections divided by prior year total
valuation of property and motor vehicles times the current year total valuation
of property and motor vehicles all as certified by the Revenue Cabinet or as
estimated by the school district.
Section 2. Required Data. Required data for
school district tax rate and related calculations shall include:
(1) Property assessments from the Department
of Property Taxation, Revenue Cabinet provided pursuant to
KRS
160.470(5);
(2) Tax rates levied by school
districts;
(3) Average daily
attendance (ADA) as calculated pursuant to
702 KAR
3:270, Section 2(3)(a);
(4) Estimated growth ADA;
(5) The state equalization amount as defined
in
702 KAR
3:270, Section 1(11);
(6) Calculated base SEEK funding as defined
in
702 KAR
3:270, Section 1(2);
(7) Tax receipts collected based on prior
year tax levies which may be adjusted for unusual circumstances as determined
by the local school district and the Division of Finance, Department of
Education;
(8) Collection rates as
defined in
702 KAR
3:270, Section 1(3); and
(9) The annual report of tax collections as
prepared by the school district's tax collector pursuant to
KRS
160.510.
Section 3. Compensating, Four (4) Percent
Increase and Subsection (2) Tax Rate Formulas.
(1) Compensating tax rate. The compensating
tax rate defined in
KRS
132.010(6) and certified to
the school district by the Department of Education pursuant to
KRS
160.470(4)(b) shall be
calculated as follows:
(a) Compensating Tax
Rate I. The Compensating Tax Rate I formula shall be as follows:
1. Prior year revenue from real
property;
2. Divided by the current
year total valuation of real property;
3. Rounded to the next higher one-tenth
(1/10) cent;
4. Equals the
Compensating Tax Rate I.
(b) Compensating Tax Rate II. The
Compensating Tax Rate II formula shall be as follows:
1. Prior year revenue from real property plus
prior year revenue from personal property;
2. Divided by the current year total
valuation of adjusted property at full rates;
3. Rounded to the next higher one-tenth
(1/10) cent;
4. Equals the
Compensating Tax Rate II.
(c) The Compensating Tax Rate shall be the
higher of the Compensating Tax Rate I and the Compensating Tax Rate
II.
(2) Four (4) percent
increase rate. The four (4) percent increase rate certified to the school
district by the Department of Education pursuant to
KRS
160.470(c) shall be
calculated as follows:
(a) Compensating tax
rate as calculated pursuant to subsection (1) of this section;
(b) Times current year total valuation of
real property;
(c) Times 104
percent;
(d) Divided by current
year total valuation of real property;
(e) Rounded to the next lower one-tenth
(1/10) cent;
(f) Equals the four
(4) percent increase rate.
(3) Subsection (2) rate. The Subsection (2)
rate certified to the school district by the Department of Education pursuant
to
KRS
160.470(4)(a) shall be
calculated as follows:
(a) Prior year maximum
real estate property tax rate;
(b)
Times prior year total valuation of real property;
(c) Plus prior year maximum personal property
tax rate;
(d) Times prior year
total valuation of personal property;
(e) Divided by the prior year adjusted tax
base;
(f) Rounded to the next lower
one-tenth (1/10) cent;
(g) Equals
the Subsection (2) rate.
(4) If the percentage increase in revenue
from real property produced by the compensating, four (4) percent increase and
Subsection (2) tax rates is less than the percentage increase in revenue from
personal property based on the same rates, then equal tax rates as calculated
pursuant to this section for the compensating, four (4) percent increase and
Subsection (2) tax rates shall be certified for both real estate and personal
property.
Section 4.
Limits on Personal Property Tax Rates. If the percentage increase in revenue
from real property produced by the compensating, four (4) percent increase or
Subsection (2) tax rates is more than the percentage increase in revenue from
personal property based on the same rates, then personal property tax rates
certified to the local school district shall be the lower of the prior year
personal property tax levy or the tax rates calculated as follows:
(1) Personal property compensating tax rate.
(a) Prior year revenue from personal
property,
(b) Times 100 percent
plus the percent increase in real property revenue based on the compensating
tax rate as calculated pursuant to Section 3(1) of this administrative
regulation;
(c) Divided by the
current year total valuation of personal property;
(d) Rounded to the next higher one-tenth
(1/10) cent;
(e) Equals the
personal property compensating tax rate.
(2) Personal property four (4) percent
increase rate.
(a) Prior year revenue from
personal property;
(b) Times 100
percent plus the percent increase in real property revenue based on the four
(4) percent increase tax rate as calculated pursuant to Section 3(2) of this
administrative regulation;
(c)
Divided by the current year total valuation of personal property;
(d) Rounded to the next higher one-tenth
(1/10) cent;
(e) Equals the
personal property four (4) percent increase tax rate.
(3) Personal property Subsection (2) tax
rate.
(a) Prior year revenue from personal
property;
(b) Times 100 percent
plus the percent increase in real property revenue based on the Subsection (2)
tax rate as calculated pursuant to Section 3(3) of this administrative
regulation;
(c) Divided by the
current year total valuation of personal property;
(d) Rounded to the next higher one-tenth
(1/10) cent;
(e) Equals the
personal property Subsection (2) tax rate.
Section 5. Maximum Equivalent Tax Rate
Allowed Pursuant to
KRS
157.440(1)(a). The maximum
equivalent tax rate allowed pursuant to
KRS
157.440(1)(a) shall be the
higher of the 1989-90 equivalent and the maximum Tier I equivalent tax rate
calculated as follows:
(1) Calculated base
SEEK funding as defined in
702 KAR
3:270, Section 1(2);
(2) Times fifteen (15) percent;
(3) Divided by average daily
attendance;
(4) Equals maximum per
pupil Tier I revenue;
(5) Divided
by the greater of the current year total valuation of property and motor
vehicles divided by the average daily attendance and the statewide equalization
amount as defined in
702 KAR
3:270, Section 1(9);
(6) Rounded to the next higher one-tenth
(1/10) cent;
(7) Plus the required
minimum thirty (30) cent equivalent tax rate pursuant to
KRS
160.470(12)(a) and the five
(5) cent levy pursuant to
KRS
157.620(1)(a);
(8) Equals the maximum Tier I equivalent tax
rate.
Section 6. Maximum
Equivalent Tax Rate Allowed Pursuant to
KRS
157.440(2). The maximum Tier
II equivalent tax rate allowed pursuant to
KRS
157.440(2) shall be
calculated as follows:
(1) Calculated base
SEEK funding as defined in
702 KAR
3:270, Section 1(2);
(2) Times thirty-four and one-half (34.5)
percent;
(3) Divided by average
daily attendance;
(4) Equals
maximum per pupil Tier II revenue;
(5) Divided by the current year total
valuation of property and motor vehicles divided by the average daily
attendance;
(6) Plus the maximum
Tier I equivalent tax rate as calculated pursuant to Section 5 above minus
five(5);
(7) Rounded to the next
higher one-tenth (1/10) cent;
(8)
Equals the maximum Tier II equivalent tax rate.
Section 7. Motor Vehicle Tax Rates.
(1) Motor vehicle tax rates may be raised to
the maximum Tier I equivalent tax rate allowable pursuant to
KRS
157.440(1)(a).
(2) Motor vehicle tax rates levied pursuant
to
KRS
132.487 which are higher than those allowed
pursuant to
KRS
157.440(1)(a) shall not be
lowered.
Section 8.
(1) The Exonerations Tax Rate allowable
pursuant to
KRS
134.590(7) shall be
calculated as follows:
(a) Exonerations
Recovery Rate I. The Exonerations Recovery Rate I shall be calculated as
follows:
1. Prior year real estate property
tax levy;
2. Times prior year total
valuation of real property plus prior year real exonerations both as certified
by the Revenue Cabinet;
3. Divided
by current year total valuation of real property;
4. Rounded to the next higher one-tenth
(1/10) cent;
5. Equals the
Exonerations Recovery Rate I.
(b) Exonerations Recovery Rate II. The
Exonerations Recovery Rate II shall be calculated as follows:
1. Prior year real estate property tax
levy;
2. Times prior year total
valuation of real property plus prior year real exonerations both as certified
by the Revenue Cabinet;
3. Plus
prior year personal property tax levy;
4. Times prior year total valuation of
personal property plus current year tangible exonerations both as certified by
the Revenue Cabinet;
5. Divided by
current year total valuation of adjusted property at full rates;
6. Rounded to the next higher one-tenth
(1/10) cent;
7. Equals the
exonerations recovery Rate II.
(2) The exonerations tax rate certified to
the school district by the Department of Education shall equal the difference
between the higher of the exonerations recovery Rates I and II and the
compensating rate as calculated pursuant to Section 3(c) of this administrative
regulation.
Section 9.
SEEK Rates Calculations. SEEK rates calculations to determine the property tax
rates necessary to achieve the required minimum thirty (30) cent equivalent
rate, maximum Tier I and maximum Tier II equivalent tax rates and a five (5)
cent equivalent rate shall be as follows:
(1)
Minimum thirty (30) cent equivalent rate. The property tax rate required to
achieve the minimum thirty (30) cent equivalent rate required pursuant to
KRS
160.470(12)(a) shall be
calculated as follows:
(a) Thirty (30)
cents;
(b) Times the current year
total valuation of property and motor vehicles as certified by the Revenue
Cabinet;
(c) Divided by the
collection rate as defined in
702 KAR
3:270, Section 1(3);
(d) Minus the current year projection for
permissive taxes;
(e) Minus the
prior year levied motor vehicle tax rate times the current year motor vehicle
assessment as certified by the Revenue Cabinet time ninety-six (96)
percent;
(f) Divided by the current
year property assessment as certified by the Revenue Cabinet;
(g) Rounded to the next higher one-tenth
(1/10) cent;
(h) Equals the
property tax rate required to achieve the required minimum thirty (30) cent
equivalent rate.
(2)
Maximum Tier I property tax rate. The property tax rate required to achieve the
maximum Tier I equivalent rate allowable pursuant to
KRS
157.440(1)(a) shall be
calculated as follows:
(a) Maximum Tier I
equivalent tax rate as calculated pursuant to Section 5 of this administrative
regulation;
(b) Times the current
year total valuation of property and motor vehicles as certified by the Revenue
Cabinet;
(c) Divided by the
collection rate as defined in
702 KAR
3:270, Section 1(3);
(d) Minus the current year projection for
permissive taxes,
(e) Minus the
prior year levied motor vehicle tax rate times the current year motor vehicle
assessment as certified by the Revenue Cabinet times ninety-six (96)
percent;
(f) Divided by the current
year property assessment as certified by the Revenue Cabinet;
(g) Rounded to the next lower one-tenth
(1/10) cent;
(h) Equals the
property tax rate required to achieve the maximum Tier I equivalent tax rate
allowable.
(3) The
property tax rate required to produce a five (5) cent equivalent tax rate shall
be calculated as follows:
(a) Five(5)
cents;
(b) Times the current year
total valuation of property and motor vehicles as certified by the Revenue
Cabinet;
(c) Divided by the
collection rate as defined in
702 KAR
3:270, Section 1(3);
(d) Divided by the current year property
assessment as certified by the Revenue Cabinet;
(e) Rounded to the next higher one-tenth
(1/10) cent;
(f) Equals the
property tax rate required to produce a five (5) cent equivalent tax
rate.
(4) Maximum Tier
II property tax rate. The property tax rate required to achieve the maximum
Tier II equivalent rate allowable pursuant to
KRS
157.440(2) shall be
calculated as follows:
(a) Maximum Tier II
equivalent tax rate as calculated pursuant to Section 6 of this administrative
regulation;
(b) Times the current
year total valuation of property and motor vehicles as certified by the Revenue
Cabinet;
(c) Divided by the
collection rate as defined in
702 KAR
3:270, Section 1(3);
(d) Minus the current year projection for
permissive taxes;
(e) Minus the
prior year levied motor vehicle tax rate times the current year motor vehicle
assessment as certified by the Revenue Cabinet times ninety-six (96)
percent;
(f) Divided by the current
year property assessment as certified by the Revenue Cabinet;
(g) Rounded to the next lower one-tenth
(1/10) cent;
(h) Equals the
property tax rate required to achieve the maximum Tier II equivalent tax rate
allowable.
Section
10. Equivalent Tax Rates.
(1) The
levied equivalent tax rate used to determine eligibility for Tier I and
Facility Support Program of Kentucky (FSPK) state equalization shall be
calculated as follows:
(a) Current year real
estate tax levy times current year total valuation of real property as
certified by the Revenue Cabinet;
(b) Plus the current year personal property
tax levy times the current year total valuation of personal property as
certified by the Revenue Cabinet;
(c) Plus the current year motor vehicle tax
levy times the current year total valuation of motor vehicles as certified by
the Revenue Cabinet;
(d) Plus
current year projected permissive tax collections;
(e) Times the collection rate as defined in
702 KAR
3:270, Section 1(3);
(f) Divided by the current year total
valuation of property and motor vehicles as certified by the Revenue
Cabinet;
(g) Rounded to the next
lower one-tenth (1/10) cent;
(h)
Equals the levied equivalent tax rate.
(2) The collected equivalent tax rate used
for comparison to the prior year's levied equivalent tax rate to determine if
the tax receipts as submitted are reasonable shall be calculated as follows:
(a) Total prior year tax receipts;
(b) Divided by the prior year total valuation
of property and motor vehicles as certified by the Revenue Cabinet;
(c) Equals the collected equivalent tax
rate.
Section
11. Five (5) Cent Tax Rate for Growth.
(1) To meet the eligibility requirements to
levy the five (5) cent tax rate for growth pursuant to House Bill 810 of the
1994 General Assembly, the following shall apply:
(a) Adjusted average daily attendance (AADA)
as calculated pursuant to 702 KAR
3:270(3) shall be used to calculate the
required growth in ADA as follows:
1. Prior
year end of year AADA;
2. Minus the
fifth previous year end of year AADA;
3. Equals the growth in ADA used to calculate
eligibility to levy the five (5) cent tax rate for growth;
(b) Districts qualifying to levy the five (5)
cent tax rate for growth shall certify to the Division of Finance, Department
of Education that current student enrollment exceeds available classroom space;
and
(c) Qualifying debt service
shall be in place at the time of the levy of the five (5) cent tax rate for
growth.
(2) The property
tax levy required to achieve the five (5) cent tax rate for growth shall be
calculated pursuant to Section 9(3) of this administrative
regulation.
Section 12.
Tax Rate Certification.
(1) Tax rates shall be
certified to the school district by the Department of Education upon receipt of
the assessment from the Revenue Cabinet, a listing of tax receipts collected
based on the prior year tax levy as provided by the school district and an
annual tax collector's report as provided by the school district to verify
prior year tax collections.
(2)
Pursuant to House Bill 81 of the 1994 General Assembly, school districts shall
levy tax rates within forty-five (45) days of the Revenue Cabinet's assessment
certification. Failure to meet this deadline shall require the use of the
compensating tax rate as calculated pursuant to Sections 3 or 4 of this
administrative regulation for that year's tax bills. Levies which are subject
to recall shall follow the provisions of
KRS
132.017.
(3) Unusual circumstances as determined by
the local school district and the Division of Finance, Department of Education
may allow a school district's tax rates to be revised and recertified by the
Department of Education.