Request By:
Gil Tucker, Chairman
Plum Creek Watershed Conservancy District
Opinion
Opinion By: Daniel Cameron, ATTORNEY GENERAL; Carmine G. Iaccarino, General Counsel; Lindsey R. Keiser, Assistant Attorney General
Opinion of the Attorney General
KRS 262.700 provides for the formation of watershed conservancy districts for the "purpose of developing and executing plans and programs relating to any phase of conservation of water, water usage, flood prevention, flood control, erosion prevention and control of erosion, floodwater and sediment damages." It is under this authority that the Plum Creek Watershed Conservancy District ("District") was established.
Located in Spencer, Shelby, Bullitt, and Jefferson Counties and covering about 24,000 acres, the District includes eleven flood prevention structures intended to protect cropland and residential structures. 1The Energy and Environment Cabinet has informed the District that because of recently built houses downstream from one of the dams in the District, the dam has been upgraded to a "high hazard." Based on that determination, the District is now faced with the need to upgrade its flood retarding structure. That need prompts the District's question: whether it may levy its assessment on real property within the district in a manner that includes or accounts for the value of any improvements to the real property within the district, or whether it may assess only the value of the acreage ( i.e. , not including improvements) within the district.
Our analysis begins with the text. To raise sufficient funds to achieve its purposes, a watershed conservancy district is authorized to "[l]evy an annual tax on the real property within the district within the limitations provided in KRS 262.760 for administration, construction, operation and maintenance of works of improvement within the district." 2KRS 262.745(1). KRS 262.760 provides that the watershed conservancy district must prepare an annual budget and thereafter assess the real property within the district an amount necessary to meet the budget. In addition, KRS 262.760(2) directs each district's board of directors to levy its "tax" in a manner sufficient to meet the district's annual budget, "either by millage rate or per acre rate." 3KRS 262.765 expressly provides that "the county clerk shall compute the tax due the district from each landowner in accordance with the rate fixed by the board of directors and the value or acreage of the real property indicated on the tax roll." KRS 262.765(2). 4
According to the text of the statute, a conservancy district may assess "real property" within the district on one of two bases: on the value of the real property ( i.e. , the millage rate) or on its acreage. KRS 262.765. Because we must give "words their plain and ordinary meaning,"
Kentucky Unemployment Ins. Comm'n v. Wilson , 528 S.W.3d 336, 340 (Ky. 2017), we read this construction by the General Assembly as a recognition of the fundamental nature of real property. By any definition, the plain and ordinary meaning of "real property" includes the land and everything permanently attached to it. See, e.g. , Black's Law Dictionary, 7th ed. 1999 (defining "real property" as "land and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land"); Merriam-Webster.com, 2021 (defining "real property" as "consisting of land, buildings, crops . . . or improvements or fixtures permanently attached to the land or a structure on it"); see also KRS 132.010(3) (defining "real property" to include "all lands within this state and improvements thereon"); see also
Grise v. Finley Commercial Enterprises , 2019 WL 645913 (Ky. App. 2019) ("[F]or purposes of real property taxation, land and improvements are ordinarily considered a singular unit of taxation.").
When the county clerk computes the tax due the conservancy district from each landowner, the county clerk does so in accordance with the rate fixed by the board of directors and the value or acreage of the real property indicated on the tax roll. KRS 262.765(2). For the reasons set forth above, when the assessment is based on the value of the real property, that value may include the value of the improvements to the real estate within the District. See KRS 262.760 (providing for assessment "either by millage rate or per acre rate") (emphasis added). On the other hand, a "per acre rate" is simply that: an assessment based on the assigned value of each acre within the district without regard to improvements.
For these reasons, it is this Office's opinion that the annual assessments levied on real property in a water conservancy district, like the Plum Creek Watershed District here, may be made by millage rate on the value of the real property, including the value of any improvements, or on a per acre basis without regard to any improvements. KRS 262.760.
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