Request By:
Representative Arthur L. Schmidt
Kentucky House of Representatives
Capitol Building
Room 314
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Thomas R. Emerson, Assistant Attorney General
This is in reply to your letter raising questions concerning a fire district and payment for fire protection services. You state that about five years ago the city of Cold Spring annexed territory, some of which was included in a fire protection district. The Board of Trustees of the Fire Protection District only recently discovered that some of its territory had been annexed by the city and you state that the property owners in the annexed area have been paying both the city and the fire district for fire protection services.
You ask if when a city not in the fire district annexes territory that is in a fire district, is that territory automatically deleted from the fire district. You ask if it is the responsibility of the city to notify the fire district or must the fire district keep track of the city's boundaries. You also ask if a refund is due the property owners and, if so, is the refund due from the city or the fire district. Another question concerns whether the fire district is obligated to seek out the taxpayers or can the fire district wait for them to ask for a refund. Your last question asks if there is a limitation on how far back the refunds go or whether the fire district has to refund all the taxes collected.
KRS 75.010(2) provides as follows:
"In no event shall any fire protection district or any volunteer fire department district include within its metes and bounds any territory at that time or thereafter included in any city of this Commonwealth which maintains a 'regular fire department, ' and which city has paid its proportionate share of the indebtedness incurred while such territory was a part of that district." (Emphasis supplied. )
KRS 75.020 deals with the annexation or reduction of territory and subsection (2) of that statute states in part as follows:
". . . The property in any territory stricken from a fire protection district or a volunteer fire department district by the incorporation of or annexation by a city of this Commonwealth shall not be relieved of liability of such taxes as may be necessary to pay its proportionate share of the indebtedness incurred while such territory was a part of that district. . . ." (Emphasis supplied. )
In connection with the assumption by the city of a debt where the city has annexed territory of a fire protection district, KRS 75.020(3) states:
"Any city that maintains a 'regular fire department, ' and has either by incorporation or annexation caused property to be stricken from a fire protection district or a volunteer fire department district, may assume the liability of such taxes as may be necessary to pay the proportional share of the indebtedness incurred while such territory was a part of said district."
In OAG 73-91, copy enclosed, we said in part that property in an area annexed by the city is not relieved of liability for such taxes as may be necessary to pay its proportionate share of the indebtedness incurred on firefighting equipment while such territory was part of a fire protection district. Thus, property owners in that part of the fire protection district annexed to the city would still be liable for their share of the debt as evidenced by the tax rate applicable in the fire protection district until the indebtedness has been paid.
In answer to your first question, while territory in a fire protection district which is annexed by a city is stricken from the district, such action does not relieve property owners in the annexed area of liability for such taxes as are necessary to pay for the proportionate share of the indebtedness incurred while such territory was part of the fire protection district.
As far as the city's responsibility to notify the fire protection district of its annexation action, the city is only required to follow the procedures set forth in the annexation statutes. While annexation is now governed by the provisions of KRS Chapter 81A, the annexation statutes were formerly set forth in KRS Chapter 81. KRS 81.230, in effect until July 15, 1980, required a fifth class city to notify each resident and freeholder of the territory to be annexed. There was also a publication requirement (KRS 81.100), but there was no requirement to notify a fire protection district.
In connection with any refund, if one is due, it would be due from the fire protection district rather than from the city. However, on the basis of the limited material you have furnished we cannot say whether a refund is due. We do not know what financial obligations and indebtedness the fire protection district incurred while the subsequently annexed area was part of the district. As stated above, property owners are not relieved of their proportionate share of the debt incurred prior to annexation just because the area was subsequently annexed by the city and stricken from the fire protection district.
Where the board of trustees of the district ascertains that it has collected too much in the way of taxes from certain property holders, we would assume that the board of trustees would make a good faith effort to locate those persons entitled to a refund, if for no other reasons, to avoid litigation which is, of course, costly and time consuming, and to maintain good will.
As far as a limitation on how far back the refunds go, we assume you are referring to a statute of limitations. KRS 413.120 deals with actions to be brought within five years and would appear to be applicable to the situation with which you are concerned, if a refund is in fact due.