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HB 801

AN ACT relating to public schools, making an appropriation therefor, and declaring an emergency.

2026 Regular Session Introduced by Patrick Flannery

Creates new and expanded funding mechanisms to equalize and finance Kentucky school facilities, technology, and district consolidations, with a new five-cent levy and emergency imp

to Appropriations & Revenue (H)
#appropriations #education #elementaryandsecondary #finance #effectivedates #emergency #publicbuildingsandgrounds #taxation
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WeVote Research Nonpartisan
Bill Summary · HB 801

Overview

HB 801 (2026RS) is an emergency, appropriation-related bill in Kentucky that focuses on public education funding, school facilities planning, and related debt/levy provisions. It amends several Kentucky Revised Statutes (KRS) to modify definitions, financing mechanisms, equalization formulas, and district reorganization options. The act includes a targeted appropriation to support equalization of taxes through SEEK funds and establishes an emergency effective date of July 1, 2026.

Main purpose and intent

  • Streamline and enhance funding mechanisms for school facilities, technology, and related capital projects.
  • Provide state-level equalization assistance to local districts leveraging new or expanded tax levies for debt service, construction, and major renovations.
  • Encourage district consolidation or reorganization of traditional school buildings facing declining enrollment or capacity issues.
  • Clarify and expand definitions related to school facilities financing, technology, and lease/purchase arrangements to support modernization efforts.
  • Declare an emergency to ensure timely implementation for the upcoming fiscal year.

Key provisions and changes

Section 1 – Definitions and terminology (KRS 157.615)

  • Updates to definitions used in KRS 157.611 to 157.640, including:
    • Available local revenue calculation (school building fund balance, capital outlay funds, etc.).
    • Expanded descriptions of bonds, leases, lease/purchase agreements, and technology systems.
    • Introduction of terms like “unmet facilities need” and “unmet technology need.”
    • Clarifies “eligible district” as those with unmet facilities need > $100,000 or eligible for technology funding.
  • Establishes terms to better structure state investment in facilities, equipment, and technology.

Section 2 – Facilities equalization and levy provisions (KRS 157.621)

  • Creates/expands levy options for local districts to support debt service, new facilities, and major renovations, with various eligibility and equalization rules.
  • Adds a new eighth subsection(1)(d) allowing an additional five-cent levy starting August 1, 2026 under specific consolidation or attendance-area criteria for traditional school buildings.
    • Conditions include: consolidation plans or attendance-area adjustments that raise average daily attendance (ADA) above 150–200 thresholds, limited past levy counts (not more than two levies under specified subparts), and bonding capacity constraints. Provides for equalization funding at 150% of the statewide average per pupil assessment for these new levies, with a 25-year expiry for levies under this subsection.
  • Repeats, extends, or clarifies prior equalization mechanisms:
    • Retroactive equalization for districts with pre-2016 levies.
    • Conditions for equalization termination or suspension if consolidation outcomes are not met within prescribed timeframes.
    • Special provisions for BRAC-related growth (Fort Knox) and Fort Knox-related district eligibility.
  • Establishes timing and eligibility rules for districts receiving equalization funding and the impact of equalization on bond retirement timelines.

Section 3 – Governance and district operations (KRS 160.290)

  • Reaffirms broad authority of local boards of education over district management, finances, and property.
  • Allows boards to set rules and bylaws, including procurement methods such as reverse auctions.
  • Requires districts with under-150 ADA traditional schools for three consecutive years to either consolidate the school or modify attendance areas to raise ADA above 200.
  • Permits interlocal cooperation agreements for service provision and allows transfer/retirement of property and staff under these arrangements, with funding allotments to help districts.

Section 4 – Appropriation

  • Appropriates $3,500,000 in each fiscal year of the 2026-2028 biennium to the SEEK budget unit specifically to fund equalization of taxes under Section 2(1)(d).

Section 5 – Effective date and emergency declaration

  • Declares an emergency to implement the act promptly.
  • Effective date: July 1, 2026.

Who/what would be affected

  • Local school districts in Kentucky, especially those:
    • Considering or implementing new levies for debt service, facilities, or major renovations.
    • With traditional school buildings facing consolidation, close-by capacity issues, or low ADA.
    • Located near Fort Knox BRAC-driven growth (specific eligibility criteria apply).
  • Kentucky Department of Education and the Kentucky Board of Education (definition changes and program approvals).
  • SEEK program budgeting and state equalization funds, with new/expanded funding flows and potential constraints.
  • Districts engaging in interlocal cooperatives for shared services.

Procedural and timeline highlights

  • New five-cent levy option becomes available August 1, 2026, under defined consolidation/attendance criteria.
  • Equalization funding mechanisms reference annual funding cycles and 150% equalization rates, with expiry conditions tied to bond retirement or consolidation milestones.
  • Emergency status means expedited consideration and implementation, aligning with the 2026-2028 funding period.
  • The act emphasizes timely district reorganizations for efficient operation in the 2027-2028 school year and beyond.

If you’d like, I can provide a district-by-district impact outline or a glossary of the key fiscal terms used in this bill.

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

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