Request By:
Mr. John C. Wagner
General Manager
Frankfort Plant Board
315 W. Second Street
P.O. Box 308
Frankfort, Kentucky 40602
Opinion
Opinion By: Steven L. Beshear, Attorney General; By Alex W. Rose, Assistant Attorney General
Your recent letter to the Attorney General was answered in OAG 83-160. We have had occasion to reconsider that opinion and have determined that it is partially incorrect and in need of supplementation.
Three questions were posed. The first pertained to fair cash value. The second and third had to do with KRS 96.179. The answers to the first and third questions are correct.
The second question is incorrect insofar as it assumes that the Plant Board is liable for taxes. The Frankfort Plant Board was established pursuant to KRS 96.171 et seq. as a municipally-owned utility.
City of Frankfort v. Silent Workers Circle, etc., Ky.App., 548 S.W.2d 178 (1977). KRS 96.175(7) states that title to any property acquired by the Board shall vest in the City for the use and benefit of the electric and water system. Therefore, the Plant Board is exempt from taxation pursuant to Section 170 of the Kentucky Constitution as public property used for public purposes.
District of Highland v. City of Covington, 164 Ky. 815, 176 S.W. 192 (1915);
Inter-County Rural Electric Cooperative Corporation v. Reeves, 294 Ky. 458, 171 S.W.2d 978 (1943).
However, as stated in OAG 83-160, if the Plant Board chooses to make the in lieu payments to the school districts and municipalities, it must make the payments to each one. The statute does not give the Plant Board the authority to pick and choose among numerous school districts and municipalities. The intent of the statute appears to be to give the Board the discretion to make in lieu payments if it so chooses. However, it is our opinion that this is the extent of the discretion and, as stated previously, if the Board exercises its discretion it must do so in a uniform and consistent manner to all applicable taxing districts.