COMMONWEALTH OF KENTUCKY

STATE FISCAL NOTE STATEMENT

GENERAL ASSEMBLY / LEGISLATIVE RESEARCH COMMISSION
1998 REGULAR SESSION / 1996-97 INTERIM

MEASURE

(X) 98 BR No. / 1401 / (X) / Senate / Bill No. / 81
() Resolution No. / () Amendment No.
SUBJECT/TITLE / AN ACT proposing an amendment to Section 170 of the Constitution of Kentucky relating to taxation.
SPONSOR / Senator Tom Buford

NOTE SUMMARY

Fiscal Analysis: / Impact / X No Impact / Indeterminable Impact
Level(s) of Impact: / State / Local / Federal
Budget Unit(s) Impact
Fund(s) Impact: / General / Road / Federal
Restricted Agency (Type) / (Other)

FISCAL SUMMARY

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Fiscal Estimates / 1997-98 / 1998-99 / 1999-2000 / Future Annual
Rate of Change
Revenues (+/-)
Expenditures (+/-)
Net Effect

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MEASURE'S PURPOSE:

This bill proposes a constitutional amendment that would apply the homestead exemption to those 62 years of age or older or on a disability pension as authorized by the General Assembly. It also provides that the homestead exemption be adjusted every five years for inflation, using 1995 as the base year.

PROVISION/MECHANICS:

This bill proposes an amendment to Section 170 of the Constitution of Kentucky to extend the homestead exemption to those age 62 or older or on a disability pension as authorized by the General Assembly. It also amends this same section to provide that the homestead exemption is be to adjusted for the consumer price index every five years, beginning in 2000. 1995 is to be used as the base year.

FISCAL EXPLANATION:

Currently, under Section 170 of the Constitution of Kentucky, the homestead exemption is available for property maintained as the permanent residence of the owner if they are 65 years or older or are classified as totally disabled by a federal program or by the railroad retirement system. This proposed legislation, if passed by the General Assembly and ratified by the voters, would allow individuals age 62 or older to be eligible for the homestead exemption and would allow the General Assembly to extend the exemption to those on a disability pension. This would increase the number of individuals eligible for the homestead exemption, which is set at $24,400 for taxable years 1997 and 1998. However, the granting of a homestead does not decrease the tax revenue and the revocation of a homestead does not increase tax revenue. It merely changes the assessment base upon which the tax rates may be calculated. Depending upon how much increase or decrease in the total homestead amount there may be a slight shifting of the tax burden.

DATA SOURCE(S) / Revenue Cabinet
NOTE NO. / PREPARER / Susan Viers Gilliland / REVIEW / DATE / 1/9/98

LRC 98-BR