Request By:
Hon. William A. Young
314 Wilkinson Street
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; Joseph R. Johnson, Assistant Attorney General
In your letter to the Attorney General dated November 25, 1980, you asked what inspection period for final recapitulations of both real and tangible personal property are required to be held by the Franklin County Property Valuation Administrator in light of a recent Court of Appeals Decision and Supreme Court Order that the 1979 assessments for real and tangible personal property be used as a basis for 1980 ad valorme tx bills. You also ask whether the Franklin County Fiscal Court may proceed to fix the tax rate for the 1981 ad valorem taxes before the end of any such inspection period.
KRS 133.045(1) provides that the tax rolls must be open for a twelve (12) day inspection period beginning on the fourth Monday in May of each year and shall be open for six (6) days each week, one of which shall be Saturday. However, the Department of Revenue may order that the inspection period be at a different time than that provided by statute. KRS 133.120(1) provides for an appeals procedure for taxpayers who are aggrieved by their assessments to the Board of Assessment Appeals. KRS 133.120(5) provides that no appeal by an aggrieved taxpayer shall delay the collection or payment of any taxes based upon the assessment in controversy. Therefore, the answer to your second question is that the fiscal court may fix the tax rate for ad valorem taxes before the end of the inspection period.
Your first question requires a somewhat more complicated response. However, the short answer is that with certain limited exceptions to be discussed below, there is no inspection period and no appeals procedures available to Franklin County real property owners for their 1980 assessments since their remedies have already been exhausted in the class action suit initiated in Franklin Circuit Court and finally culminating in the Kentucky Supreme Court.
This dispute originally arose when the Franklin County Property Valuation Administrator increased property assessments in Franklin County ranging from approximately one percent (1%) to four hundred percent (400%) above 1979 assessments. A class action on behalf of all rural and urban real property owners in Franklin County was brought which challenged the assessments as not being uniform and being arbitrary without constitutional or statutory authority. The circuit court agreed with the taxpayers, struck down the 1980 assessments and ordered that the 1979 assessments be used as a basis for 1980 tax bills. However, the judgment was later amended to exclude property which had been in 1979, sold, significantly improved or changed in character.
On appeal, the Court of Appeals affirmed the Franklin Circuit Court. The Kentucky Supreme Court granted limited discretionary review within only three (3) weeks of the Court of Appeals decision. The speed with which the High Court ruled on the motion was more than likely due to the exigencies involved in sending out 1980 ad valorem tax bills as soon as possible.
In its Opinion rendered October 31, 1980, styled Jack Parrent et al. v. Ben F. Fannin et al., File No. 80-CA-1475-MR, the Court of Appeals found that the administrative remedy for challenging 1980 assessments was not the exclusive remedy and that the taxpayers had the right to challenge their assessments in a class action proceeding in circuit court.
The first issue to be addressed in this appeal is whether the taxpayers may maintain a class action to challenge their 1980 assessments when KRS 133.120 provides them with the right to appeal their individual assessments to the Board of Assessment Appeals. The Department of Revenue asserts that the taxpayers remedy is exclusive, and further that the right to an administrative appeal provides the taxpayers with an adequate remedy at law which precluded the lower court from enjoining the PVA from preparing 1980 tax bills based upon his 1980 assessments. . . . [W]e believe that there is no requirement that the taxpayers in a class action must exhaust their individual remedies prior to challenging an entire annual assessment on the ground that such assessment is void. (Emphasis added).
Therefore, in finding that the action was properly maintainable as a class action and that the circuit court had jurisdiction to hear the taxpayers' claims, the Court of Appeals found that the taxpayers' judicial remedies were properly exercised in lieu of statutorily created administrative remedies.
On November 21, 1980, the Kentucky Supreme Court granted discretionary review (No. 80-SC-778-D). The Court limited review to "whether the assessment procedures and the method chosen to attack the assessments were appropriate." However, the High Court specifically declined to review the Court of Appeals Judgment covering the 1980 tax bills. In other words, although the Supreme Court will review whether the taxpayers suit was properly maintainable as a class action in circuit court, the Court of Appeals decision will not be reviewed as it affects 1980 assessments only. Insofar as the Supreme Court has affirmed the Court of Appeals decision that the taxpayers' administrative remedies were not the exclusive method to challenge 1980 assessments and that the taxpayers' class action was maintainable in circuit court, the real property owners have no further remedies by which to attack their 1980 assessments. This, of course, does not apply to those taxpayers exempted by the Franklin Circuit Court Judgment. The Supreme Court has yet to rule on whether the circuit court class action was maintainable to challenge assessments for future years.
In conclusion, there is no inspection period and no appeals procedure now available to Franklin County urban and rural real property owners as to their 1980 assessments since their remedies have already been exhausted in the courts. The only exceptions are for taxpayers whose property in 1979 was sold at a voluntary sale, significantly improved or changed in character. The other exceptions are, of course, personal and commercial property owners in Franklin County since they were not represented in the class action suit. As to these exceptions only, the inspection period and appeals procedures are still available.