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AN ACT relating to special districts. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 65 IS CREATED TO 3
READ AS FOLLOWS: 4
As used in Sections 1 to 6 of this Act: 5
(1) "Developer" means one (1) or more persons or entities that petitions a local 6
government for the establishment of a district as set out in Section 2 of this Act, 7
and that is responsible for the development of residential property within a 8
district; 9
(2) "District" or "residential infrastructure development district" means an area 10
that: 11
(a) Is composed of five (5) or more acres of land; 12
(b) Requires a capital cost to complete development that is equal to or greater 13
than five million dollars ($5,000,000); 14
(c) Upon its complete development will have more than one-half (1/2) of its 15
space dedicated to residential housing; and 16
(d) Is established as set out in Sections 1 to 6 of this Act; 17
(3) "Establishing ordinance" means an ordinance of the local government 18
establishing a district as set out in Section 2 of this Act; 19
(4) "Infrastructure" means: 20
(a) The streets, roads, bridges, and sidewalks, and the water, wastewater, 21
natural gas, electric, telecommunications, and storm water facilities 22
required for the development of residential property within a district, 23
whether located within or without the district, that benefit the properties 24
within the district; and 25
(b) The land within the boundaries of the district required to be donated, 26
dedicated, or otherwise made available to a local government for public 27 UNOFFICIAL COPY 25 RS SB 50/GA
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purposes; 1
(5) "Infrastructure costs" means: 2
(a) All costs that may be capitalized under generally accepted accounting 3
principles for purchasing, constructing, installing, and equipping 4
infrastructure; 5
(b) The fees or costs imposed by a municipality or utility service provider: 6
1. Related to the construction or installation of infrastructure; or 7
2. As a condition to the delivery of utility services to properties within the 8
district; and 9
(c) The cost of any land required to be donated, dedicated, or otherwise made 10
available to a governmental entity for public purposes, which land shall be 11
valued at either the developer's demonstrated cost or, if the value of the land 12
has subsequently been appraised, its appraised value, whichever is higher; 13
(6) "Initiating petition" means a petition provided to the local government 14
requesting the establishment of a district as set out in Section 2 of this Act; 15
(7) "Local government" means a city, county, consolidated local government, urban-16
county government, charter county government, or unified local government that 17
establishes and operates a district as set out in Sections 1 to 6 of this Act; 18
(8) "Owner" means the owner of record of a parcel within a district or the owner's 19
authorized representative; and 20
(9) "Special assessment" means a special charge fixed on property to finance 21
infrastructure costs as set out in Sections 1 to 6 of this Act. 22
SECTION 2. A NEW SECTION OF KRS CHAPTER 65 IS CREATED TO 23
READ AS FOLLOWS: 24
(1) A residential infrastructure development district shall be established in the 25
following manner: 26
(a) The developer and each owner of property proposed to be included in a 27 UNOFFICIAL COPY 25 RS SB 50/GA
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district shall sign an initiating petition requesting the establishment of a 1
district, which shall be forwarded to the local government. The initiating 2
petition shall set forth: 3
1. The name and address of the developer; 4
2. The local government responsible for overseeing a district; 5
3. A map and description of the area to be included within the district; 6
4. A list of each parcel to be included within the district that contains the 7
parcels' mailing addresses; 8
5. A site development plan for the district showing the area in the district 9
that is anticipated to be used for residential housing; 10
6. A description of the infrastructure that the developer anticipates will 11
be necessary to complete the development and an estimated cost of that 12
infrastructure; 13
7. The cost that the developer anticipates is necessary to complete the 14
development; 15
8. The proposed rate of the special assessment to be imposed; and 16
9. A formal request that the local government establish the district; 17
(b) Upon receipt of the initiating petition a local government shall, within 18
ninety (90) days, approve or deny the petition. The decision to approve or 19
deny a petition is solely at the discretion of a local government. To approve 20
a petition a local government shall: 21
1. Determine whether the petition contains the information required in 22
paragraph (a) of this subsection; 23
2. Conduct a public hearing concerning the proposed establishment of 24
the district, notice of which shall be provided in the usual method of 25
providing notice of a public meeting and shall include mailed, written 26
notices to each property owner whose property is proposed to be 27 UNOFFICIAL COPY 25 RS SB 50/GA
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included within the district; and 1
3. Adopt an establishing ordinance that contains: 2
a. The name and address of the developer; 3
b. The local government responsible for overseeing the district; 4
c. A map and description of the area to be included within the 5
district; 6
d. A list of each parcel to be included within the district that 7
contains the parcels' mailing addresses; 8
e. A statement that the properties within the district may be subject 9
to a special assessment; 10
f. A description of the infrastructure that the local government has 11
authorized to be financed via a special assessment; 12
g. A description of the method of assessing special assessments as 13
set out in subsection (2) of Section 4 of this Act; 14
h. The time and manner in which the special assessment shall be 15
paid; and 16
i. The portion of the special assessment to be retained by the local 17
government for the payment of administrative expenses as set out 18
in subsection (4) of Section 4 of this Act; and 19
(c) The establishing ordinance may differ from the initiating petition, but the 20
local government shall endeavor to negotiate with the developer and the 21
owners of any property to be included within the district regarding 22
differences between the initiating petition and the establishing ordinance 23
prior to its passage. 24
(2) A property owner that signs a petition pursuant to subsection (1)(a) of this section 25
shall not be permitted to remove the property owner's name from the petition. 26
(3) Each district established pursuant to Sections 1 to 6 of this Act shall be dissolved 27 UNOFFICIAL COPY 25 RS SB 50/GA
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by the local government immediately upon the payment and discharge of all 1
outstanding debt obligations incurred as a result of infrastructure costs for the 2
district. 3
SECTION 3. A NEW SECTION OF KRS CHAPTER 65 IS CREATED TO 4
READ AS FOLLOWS: 5
(1) A local government shall have the power to issue bonds, notes, or other 6
obligations for the purpose of: 7
(a) Paying infrastructure costs identified in the establishing ordinance; 8
(b) Reimbursing the developer for the payment of prior infrastructure costs 9
identified in the establishing ordinance; or 10
(c) Refinancing those bonds, notes, or obligations consistent with applicable 11
law. 12
(2) A local government shall use revenue collected from special assessments it is 13
authorized to levy pursuant to Section 4 of this Act for the payment of any bond, 14
note, or other obligation issued pursuant to subsection (1) of this section. 15
(3) The maximum term of any bonds, notes, or other debt obligations issued 16
pursuant to this section shall not exceed thirty (30) years from the date of first 17
issuance. 18
SECTION 4. A NEW SECTION OF KRS CHAPTER 65 IS CREATED TO 19
READ AS FOLLOWS: 20
(1) Upon the adoption of an establishing ordinance, a local government is authorized 21
to levy special assessments against all properties located within a district. The 22
revenue collected from special assessments shall be applied to infrastructure costs 23
identified in the establishing ordinance and may be applied to administrative 24
costs as set out in subsection (4) of this section. 25
(2) The local government shall determine the total costs and expenses to be paid from 26
special assessments, and apportion those costs and expenses upon the various 27 UNOFFICIAL COPY 25 RS SB 50/GA
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properties located within the district in accordance with the benefits conferred 1
upon the properties within the district. In determining the benefits to each 2
property, the governing body may consider factors regarding the property, 3
including: 4
(a) Frontage to infrastructure; 5
(b) Total area; and 6
(c) Proportion that the assessed value of each property has to the total property 7
within the district. 8
(3) A local government shall impose and collect special assessments annually. 9
(4) A local government may provide that a total of up to five percent (5%) of the 10
revenue collected from a special assessment may be used for administrative 11
expenses, including overhead costs associated with the collection of the special 12
assessment. 13
(5) A local government shall prepare an assessment roll that lists the address and 14
owner of each property within the district and the assessed value of the property. 15
A local government shall update the roll whenever property listed on the 16
assessment roll is subdivided or its value is reassessed. 17
(6) If a property owner fails to pay an assessment on or before the date determined by 18
the local government, interest of one percent (1%) per month and a penalty of 19
one percent (1%) per month shall be added to the assessment. 20
SECTION 5. A NEW SECTION OF KRS CHAPTER 65 IS CREATED TO 21
READ AS FOLLOWS: 22
(1) An assessment, any interest accruing on the assessment, and the costs of 23
collection of the assessment as set out in Section 4 of this Act constitute a lien on 24
and against the property upon which the assessment is levied. The lien shall be 25
superior to a lien of any trust deed, mortgage, mechanic's lien, or other 26
encumbrance, but shall not be superior to any lien for the payment of taxes or a 27 UNOFFICIAL COPY 25 RS SB 50/GA
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lien established pursuant to KRS 65.8835. 1
(2) Amounts collected by a local government shall not be allocated to the payment of 2
a special assessment as set out in Section 4 of this Act until all taxes, penalties, 3
and interest relating to ad valorem taxes imposed by any governmental entity 4
have been paid in full. 5
(3) If any assessment is or becomes delinquent and the property subject to the 6
assessment has been sold to the local government as a result of the delinquency, 7
redemption of that property is permitted upon payment, not later than one (1) 8
year after the date of sale, of the full amount of assessments due, plus interest 9
and penalties. 10
SECTION 6. A NEW SECTION OF KRS CHAPTER 65 IS CREATED TO 11
READ AS FOLLOWS: 12
(1) A residential infrastructure development district may be formed by two (2) or 13
more local governments acting jointly. 14
(2) Each local government acting jointly to establish a district shall enter into an 15
interlocal agreement concerning the district. 16
(3) Each local government acting jointly to establish a district shall follow the 17
procedures set out in Section 2 of this Act, but may satisfy the public hearing 18
requirement set out in subsection (1)(b)2. of Section 2 of this Act by conducting a 19
single joint public hearing. 20
(4) Prior to the completion of establishing ordinances, local governments acting 21
jointly shall determine which local government will be responsible for the 22
specified infrastructure costs and the collection of special assessments authorized 23
under Section 4 of this Act. This information shall be provided in the establishing 24
ordinance and the interlocal agreement. 25