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Bill Summary · HB 560

Overview

HB 560 (2026 Session, Kentucky) is an appropriations-related bill that aims to address funding for school districts with a high percentage of tax-exempt property. The bill's core goal is to adjust or support the revenue streams of districts that experience reduced locally‑generated property tax collections due to tax-exempt land and facilities within their boundaries.

Purpose and intent

  • To provide funding mechanisms or adjustments to ensure school districts with a substantial share of tax-exempt property receive appropriate support.
  • To mitigate revenue disparities created when a district's tax base is diminished by government, nonprofit, religious, or other tax-exempt properties.
  • To preserve or improve educational program funding, equity, and services in affected districts.

Key provisions and changes (subject to final text)

Note: The bill’s detailed text would specify exact mechanisms; based on the title and typical structure for this policy area, likely provisions include:

  • A funding formula adjustment for districts with a high percentage of tax-exempt property, potentially:
    • A supplemental local revenue factor or state-derived compensatory funds to offset lost property tax revenue.
    • A threshold percentage of tax-exempt property used to determine eligibility for assistance.
  • Definition and measurement of “high percentage of tax-exempt property” (e.g., share of total assessed property value that is tax-exempt).
  • Allocation method for the appropriated funds, including:
    • How funds are distributed among eligible districts (per-pupil, per-ADA, or base amount with supplements).
    • Caps or hold-harmless provisions to protect districts during transition.
  • State/Local fiscal responsibilities:
    • Clarification of state contributions versus local revenue requirements.
    • Any requirements for districts to meet metrics or reporting to receive funds.
  • Timing and duration:
    • Effective date(s) for the new funding mechanism.
    • Whether the provision is temporary (sunset) or permanent.
  • Administrative and oversight provisions:
    • Roles for the Department of Education, State Budget Office, and the legislature in monitoring and adjusting funding.

Who would be affected

  • School districts with a high percentage of tax-exempt property (e.g., campuses, governmental facilities, nonprofits) that reduce taxable base.
  • Local school boards and district offices responsible for budget planning and reporting.
  • Kentucky Department of Education (potentially) and the State Budget Office, which would administer and oversee the funding adjustments.
  • Taxpayers within eligible districts, indirectly affected through changes in local tax rate pressures and state aid.

Procedural and timeline aspects

  • First action: Introduced in the Kentucky House on February 4, 2026.
  • Referral: Assigned to Committee on Committees (H) and subsequently to Appropriations & Revenue (H) on February 11, 2026.
  • Next steps typically include committee hearings, potential amendments, and floor consideration in the House, followed by Senate action and possible conference committee if differences arise.
  • The bill’s effectiveness would hinge on final language, budget appropriations, and any enacted companion measures in the Senate.

Practical considerations

  • Equity implications: Aimed at balancing funding so districts aren’t disproportionately disadvantaged by tax-exempt properties.
  • Budget impact: Requires a dedicated appropriation or reallocation of state funds; may influence overall education funding levels and future budget decisions.
  • Data and measurement: Accurate assessment of tax-exempt property share and ongoing monitoring will be essential for eligibility and funding adequacy.

If you’d like, I can tailor this summary further once the final bill text is available, including line-by-line provisions, fiscal notes, and estimated funding amounts.

Compiled from official sources — confirm details with the bill’s official record.

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