Page 1 of 2 LRC 2024-BR1567-HB835
COMMONWEALTH OF KENTUCKY FISCAL NOTE STATEMENT
LEGISLATIVE RESEARCH COMMISSION
2024 REGULAR SESSION
MEASURE
2024 BR NUMBER 1567 HOUSE BILL NUMBER 835
TITLE AN ACT relating to real property.
SPONSOR Representative Kim Banta
FISCAL SUMMARY
STATE FISCAL IMPACT: YES NO UNCERTAIN
OTHER FISCAL STATEMENT (S) THAT MAY APPLY: ACTUARIAL ANALYSIS
LOCAL MANDATE CORRECTIONS IMPACT HEALTH BENEFIT MANDA TE
APPROPRIATION UNIT(S) IMPACTED:
FUND(S) IMPACTED: GENERAL ROAD FEDERAL RESTRICTED
FISCAL
ESTIMATES
2023-2024 2024-2025 2025-2026 ANNUAL IMPACT AT
FULL
IMPLEMENTATION
REVENUES (indeterminable) (indeterminable) (indeterminable) (indeterminable)
EXPENDITURES
NET EFFECT (indeterminable) (indeterminable) (indeterminable) (indeterminable)
( ) indicates a decrease/negative
PURPOSE OF MEASURE: The purpose of HB 835 is to amend the definition of "real
property" for property tax purposes to include mains, pipes, pipelines, and conduits that are
authorized to be installed in, upon, or under any public or private street or place and used in the
collection, transmission, distribution, conducting, sale or furnishing of heat, steam, water,
sewage, natural or manufactured gas, or electricity to or for the public.
FISCAL EXPLANATION : Historically, the Department of Revenue classified pipelines as real
property. Beginning in 2023, pipelines were reclassified as tangible personal property as a result
of the ruling in the court case, Department of Revenue v. Marathon Pipe Line LLC, 653 S.W.3d
104 (Ky. App. 2022). HB 835 will restore the classification of real property for certain mains,
pipes, pipelines, and conduits.
HB 835 contains a retroactive clause, which will allow the amended definition of real property to
apply on or after January 1, 2023. The state tax rate for tangible personal property is 45¢ per
$100 of assessed value. The state tax rate for real property is 11.4 ¢ per $100 of assessed value.
In accordance with KRS 134.590, taxpayers who paid property tax upon the classification of Page 2 of 2 LRC 2024-BR1567-HB835
tangible personal property and whose property is now classified as real property under HB 835
may request a refund.
The data needed to compute the fiscal impact of HB 835 is not available; however, due to the
lower tax rate for real property, the fiscal impact is expected to be a reduction in general fund
moneys.
DATA SOURCE(S): Kentucky Department of Revenue; LRC Staff
PREPARER: Cynthia Brown NOTE NUMBER: 141 REVIEW: JH DATE: 3/25/2024