AN ACT relating to funding school districts that have a high percentage of tax-exempt property.

Amend KRS 45.021 to require the Finance and Administration Cabinet to contract with each local board of education of a district that has 65% or more in tax-exempt real property and that does not receive financial relief from other sources for the tax revenue lost from the tax-exempt property, to provide for recoupment to the board of at least 25% of the local board of education's lost tax revenue from the tax-exempt properties.

Introduced: February 4, 2026

Last action: February 11, 2026

To Appropriations & Revenue (H)

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This bill would require the state to enter into contracts with school districts where 65% or more of real property is tax-exempt, such as property owned by governments or nonprofits that cannot be taxed. In those districts, the state would be required to pay back at least 25% of the local school board's lost tax revenue, but only if the district is not already receiving financial relief from other sources for that loss. This aims…

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