January 4, 2016

Plaintiffs Seek Rehearing of Kentucky Supreme Court Decision Upholding 911 Fee

Written By

By Erica Horn and Maddie Schueler

The Greater Cincinnati/Northern Kentucky Apartment Association and other commercial and residential property owners in Campbell County, Kentucky, (collectively, the “Association”) have filed a petition seeking rehearing of the Kentucky Supreme Court’s decision upholding a flat fee to fund 911 service (the “911 fee”).  The $45 annual fee is placed on the property tax bills of property owners in Campbell County.  Five members of the Court (the “Majority”) recently held the fee, imposed by an ordinance passed by the Campbell County Fiscal Court (the “County”), is constitutional [1] The Majority held the fee is a valid exercise of the County’s statutory authority under KRS § 65.760(3), which provides, in pertinent part, “The funds required by a city, county, or urban-county government to establish and operate 911 emergency telephone service . . . may be obtained through the levy of any special tax, license, or fee not in conflict with the Constitution and statutes of this state.” (emphasis added). 

Kentucky Rule of Civil Procedure 76.32 provides that a petition for rehearing will be granted “when it appears that the court has overlooked a material fact in the record, or a controlling statute or decision, or has misconceived the issues presented on appeal or the law applicable thereto.”  In its petition, the Association argues the Court’s decision upholding the 911 fee dangerously expands local authority to raise revenue and removes protections afforded taxpayers and property owners since the current Kentucky Constitution was adopted in 1891.  Specifically, the Association argues the Majority’s Opinion (1) misconceives the issues presented by failing to address whether the 911 fee is an unlawful tax; (2) conflicts with the holdings in prior decisions, including the Kentucky Court of Appeals’ decision in Barber v. Commissioner of Revenue [2] and the Kentucky Supreme Court’s decision in City of Bromley v. Smith [3]; and (3) fails to apply the longstanding canon of statutory construction that delegations of authority to local governments to impose exactions are strictly construed.

Although the Association argued throughout the action that the 911 “fee” was, in reality, an unconstitutional flat-rate tax, the Majority erroneously held that constitutional provisions concerning local government’s taxing authority were not relevant to its analysis.  The Majority also ignored the holdings in Barber and Bromley, which invalidated similar flat fees on property to fund fire protection, life squad, and nonfire-related emergency services.  Furthermore, the Majority failed to strictly construe KRS § 65.760(3) in favor of non-delegation.

As the Association notes, the Majority’s Opinion gives local governments unprecedented authority to impose flat fees on property to fund virtually any type of governmental service.  The County has responded to the Association’s petition, which will be assigned to a member of the Court other than the justice that authored the Opinion. 

The authors’ firm represents the Association in this action.

[1] Greater Cincinnati/Northern Kentucky Apartment Ass’n, Inc. et al. v. Campbell County Fiscal Court et al., 2014-SC-000383-TG (Ky. Oct. 29, 2015) (to be published).

[2] 674 S.W.2d 18 (Ky. App. 1984).

[3] 149 S.W.3d 402 (Ky. 2004).