Request By:
Mr. Ralph E. McClanahan
Estill County Judge/Executive
Courthouse
Irvine, Kentucky 40336
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Concerning county funding of an ambulance service, you present the following questions:
"1. Does the Fiscal Court have the authority to levy a special tax for this service?
"2. Does House Bill 44 enter into this picture if #1 can be done?
"3. Does the district concept apply in this funding?
"4. Can a referendum be called for this funding?
"If the answer is yes, could this be put on the ballot for the November voters? "
The questions relating to ambulance service point up, as a matter of statutory perception, three major headings: Ambulance Service as a Direct County Operation, Ambulance Service Under a County Franchise, and District Ambulance Service, as a separate governmental entity.
AMBULANCE SERVICE AS A DIRECT COUNTY OPERATION
In response to question no. 1, if the ambulance service is directly operated by the county, KRS 67.083(3)(d) is the authority for that. Such a direct operation may be funded from county general revenues. If necessary, the fiscal court could levy an additional ad valorem tax to fund a county operated ambulance service. See § 171, Kentucky Constitution, and Driver v. Sawyer, Ky., 392 S.W.2d 52 (1965). KRS 68.090(1) provides that "For county purposes the fiscal court of each county shall levy an ad valorem tax on all property subject to county taxation. " (Emphasis added). As we said above, a county ambulance service involves a county purpose under KRS 67.083(3)(d). If an additional ad valorem tax (in addition to the county's regular ad valorem tax) is necessary to fund the county ambulance service, the order or resolution of fiscal court so providing the tax should specify this purpose (ambulance service) involved. See KRS 68.100 and § 180, Kentucky Constitution. Of course, the total county ad valorem tax rate cannot exceed the constitutional rate under § 157 of 50 cents on the hundred dollars of assessed property nor can the total tax rate exceed any lesser limit of taxation imposed by the General Assembly on counties in the form of roll-back legislation. See Rea v. Gallatin County Fiscal Court, Ky., 422 S.W.2d 134 (1967); KRS 68.245, and KRS 132.010 (compensating tax rate) .
Essentially the "compensating tax rate" , as defined in KRS 132.010(6), "is that rate which applied to the current year's assessment of property subject to taxation, excluding new and personal property, produces an amount of revenue approximately equal to that produced in the preceding year from real property." (Emphasis added). KRS 68.245(2) and (3) permits a county's exceeding the compensating tax rate, without a vote of the people, up to four percent 4%, subject to the provisions of KRS 68.245(5), which includes a public hearing with notice to hear comments from the public regarding the proposed tax rate which exceeds the compensating tax rate. Where the proposed tax rate exceeds the compensating tax rate by more than 4%, the tax rate is subject to a recall vote or reconsideration by the voters of the county pursuant to KRS 68.245(6).
As for question no. 2, i.e., the application of House Bill 44 to question no. 1, House Bill 44 is applicable to this extent: Under KRS 68.245(6), and if the proposed county tax rate is more than four percent (4%) over the amount of revenue produced by the compensating tax rate as defined in KRS 132.010, a recall vote or reconsideration by the county voters, as provided in KRS 132.017, shall be advertised as directed in KRS 68.245(6)(b). See the recall petition, delaying the effective date of a fiscal court order providing a tax rate in excess of 4% over the compensating tax rate, in KRS 132.017(1)(a). See KRS 132.017(1)(b), providing that on a recall petition (10% of the voters etc.) being filed, the fiscal court may cancel an election on the question of exceeding the 4% over the compensating tax rate by simply reducing the tax rate so as not to exceed the 4%. Where the election is necessary, see KRS 132.017(2), concerning the fiscal court's certifying the question for the ballot of the next regular election and the proper framing of the question on the ballot. A majority vote carries.
AMBULANCE SERVICE UNDER A COUNTY FRANCHISE
Question 3 relates to the ambulance district concept. Before answering that question, we refer you to KRS 65.710, et seq. , whereby the fiscal court, without a vote of the people, may let an ambulance service out under contract to private persons or a private corporation, provided such a franchise is let out under competitive bidding pursuant to § 164 of the Kentucky Constitution. See the special requirements of KRS 65.710. Such a franchise may be granted for up to a twenty year period under § 164 of the Constitution, contrary to the one year limitation of KRS 65.710(5). A fiscal court could subsidize such an operation created under § 164 of the Constitution and KRS 65.710. However, where any county debt would be created that would exceed the funding available out of current county revenues, then under § 157 of the Constitution a vote of two-thirds of the people of that county would be necessary to validate such county financial obligation. Further, where additional ad valorem taxes would have to be levied by the county under such a subsidization of the franchise, see the analysis of that problem relating to financing under question no. 1, above.
DISTRICT AMBULANCE SERVICE AS A SEPARATE GOVERNMENTAL ENTITY
Now, as relates to the district concept, an emergency ambulance service district may be created pursuant to KRS 108.080, et seq. Under KRS 108.100, the question of establishing such a district may be submitted to the voters of the county upon the filing of a petition therefor or upon the determination of the fiscal court. Such district is funded by a special ad valorem tax not to exceed ten cents ($0.10) on each one hundred dollars of the assessed valuation of all property in the district. Such a district is a taxing district within the meaning of § 157 of the Kentucky Constitution. The district tax would be entirely separate from the county's ad valorem tax and would not be considered within the county's tax rate limitations.
See the alternative method for creating an ambulance service district, with its own ad valorem tax under § 157, Constitution, under KRS 108.105. This latter method consists of a fiscal court order creating the district without any intervening petition or vote of the people. We are of the opinion that KRS 108.100 and KRS 108.105, since the latter relates to an "alternative means of creating an ambulance service district," should be construed together, i.e., in pari materia, in our construing KRS 108.105 to involve a taxing district within the meaning of § 157 of the Constitution, which involves a separate tax independent of the county tax levy. See Economy Optical Co. v. Kentucky Board of Opt. Exam., Ky., 310 S.W.2d 783 (1958) 784. See also KRS 108.110 and 108.140(8).
REFERENDUM FOR FUNDING
Concerning question no. 4, as to a referendum for funding an ambulance service, we have dealt with that where applicable above.
As to whether the ambulance question can be put on the ballot for the November (1981) voters, this question could arise where an additional ad valorem tax is necessary to fund an ambulance service directly operated by the county. The vote would be necessary where the tax would exceed 4% over the compensating tax rate of the county. The same is true where the county would subsidize a private firm's operation of an ambulance service under § 164, Constitution, and again where the necessary tax would exceed 4% over the compensating tax rate. However, as to whether the required vote of the people could be effected at this November election, you and your county attorney should consider your county situation under the timetable outlined in KRS 68.245 and KRS 132.017.
Where a vote of the people is necessary under § 157, Constitution, to validate a contractual debt occasioned by subsidizing a person or a company holding a franchise, as explained above, we note that the election law contains no minimum time for the fiscal court's certifying by a formal order the § 157 question to the county clerk before the regular election. However, we believe it should be so certified to the county clerk, by a formal fiscal court order, before the ballots are printed.