Request By:
Mr. M.E. Combs
Director
Division of County & Municipal Accounting
Department of Finance and Administration
Capitol Annex
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You have written that you have problems arising out of your administering the fund in the state treasury entitled "Local Government Economic Assistance Fund." See KRS 42.450 through 42.495.
Your letter outlines in detail your administrative analysis of the pertinent statutes, KRS 42.450, 42.455, and 42.470, relating to the administration of this fund and in allocating the funds among local governments.
You have established thus far certain eligibility requirements for local governments participating in this program.
Your first question is whether you have any inherent or implied responsibility to go further, in connection with the enrollment and eligibility of newly incorporated cities for the first time?
Pursuant to KRS 42.455(5), 200 KAR 4:005, inplementing the program, has been promulgated.
We assume from your letter that you are following the literal or express mandates of the subject statutes in administering this program.
KRS 42.475 reads:
"Ten percent (10%) of the funds allocated to each county under the provisions of KRS 42.470 shall be allotted to the incorporated areas within the county based on the ratio that the population of each incorporated area bears to the total population of all the incorporated areas within the county; except that incorporated areas shall not be eligible for funds allocated to counties under the provisions of KRS 42.490 and 1980 Acts, ch. 394, § 11."
In applying the program to incorporated areas under KRS 42.475, it is our opinion that the motive for incorporating (even if for the sole purpose of benefiting from this fund) is academic. You are only required to determine whether the applicant exists as an incorporated city. See KRS 81.010, 81.050 and 81.060. Under the literal terms of KRS 42.475, it is not your duty to determine precisely what municipal functions are being carried on. The statute must be accepted and applied as it is written.
Commonwealth v. Glover, 132 Ky. 588, 116 S.W. 769 (1909).
Question No. 2 concerns that point in time when a newly enrolled city is eligible to receive payment from the LGEA fund.
KRS 42.480 reads:
"(1) On or before July 1, 1981, and each year thereafter, the secretary, finance and administration cabinet, shall provide the legislative body of each local government eligible for funds under the provisions of KRS 42.450 to 42.495, an estimate of the funds that will be allocated to the local government for fiscal year 1981-82, and each year thereafter.
"(2) On or before the fifteenth (15th) of the first month of a quarter, the secretary, finance and administration cabinet, shall cause to be remitted to the legislative bodies of the local governments eligible for funds under the provisions of KRS 42.450 to 42.495, the funds allocated to the respective local governments for the prior quarter; except that the remittance for the last quarter of a fiscal year shall be made after the close of the fiscal year accounting records, and shall be adjusted to provide the balance of the annual allocation due the local government. "
Under the literal wording of KRS 42.480, the allocating process of the Finance Cabinet cannot be properly and fairly applied except in terms of the cities actually in existence and eligible on or before July 1, 1981, or on or before July 1, of each year thereafter. In KRS 42.480(1) the estimate of the funds to be allocated to eligible local governments must be made. Thus the inevitable starting point in the whole program of allocation is the estimate of allocation to then existing eligible local governments. In this manner the actual schedule of payment to eligible local governments, under KRS 42.480(2), must be followed. Concerning due process and equal protection of the laws, both fundamental fairness and impartiality in applying law, see § 2,
Kentucky Constitution, and Pritchett v. Marshall, Ky., 375 S.W.2d 253 (1964).
Question No. 3 is in regard to the general tax effort referred to in KRS 42.495(1) and (2). That statute reads:
"(1) In the event that a qualifying local government unit reduces its general tax effort for any fiscal year, below the level of fiscal year 1979-80, that governmental unit shall forfeit funds that would otherwise be available under the provisions of KRS 42.450 to 42.495 on a dollar-for-dollar basis.
"(2) For purposes of this section, 'general tax effort' shall mean the total revenues raised in fiscal year 1979-80 from the levy of all of the taxing district's taxes in fiscal year 1979-80. Taxes based upon the 1979 assessment of property shall be considered to be taxes levied and collected for fiscal year 1979-80."
The forfeiture of funds mentioned in KRS 42.495 can only apply to an eligible city which has exercised the General Assembly's direction in KRS 92.280 and has engaged in a general tax effort, as defined in KRS 42.495(2). Subsection (1) of KRS 92.280 provides that "the legislative body of each city of the second to the sixth class shall provide each year, by ordinance, for the assessment of all real and personal property within the corporate limits that is subject to taxation for city purposes, and shall levy an ad valorem tax thereon for city purposes. (Emphasis added). Further, KRS 42.495(2) makes it clear that "general tax effort" shall mean the total revenues raised in fiscal year 1979-80 from the levy of all the taxing district's taxes in fiscal year 1979-80. Unfortunately the legislature apparently had in mind only counties and cities in existence and counties and cities having a tax levying and tax raising history as of the 1979-80 fiscal year. 1979-80 is the pivotal base year.
The Court of Appeals, in George Wohrley, Inc. v. Commonwealth, Dept. of Rev., Ky., 495 S.W.2d 173 (1973), wrote that "when a statute defines words used therein we look to the legislative definition rather than the dictionaries or common usage."
It is our opinion, considering the literal wording of KRS 42.495, that any city incorporated as such after the fiscal year of 1979-80 and thus not having a general tax effort, as called for in the statute, does not come within the operative effect of the statute.