KentuckySB 1332026 Regular SessionSenateWALLET

AN ACT relating to the fiscal reporting of local entities.

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 3 benefits, 0 costs, 5 mixed.

Dedicated fund for records storage

The $10 reimbursement for permanent record storage goes into a separate, permanent county fund. Money is transferred monthly within 10 days after month end and cannot lapse to the general fund. County clerks use it only for storage equipment, software, staff time for digitizing, cloud storage, and cybersecurity. An annual report of receipts, spending, and balances is due to the Legislative Research Commission by August 1.

Smooth handoff for county offices

An outgoing county official must settle accounts within 60 days after the term ends or a vacancy occurs. The official must obtain a quietus and deliver all office records to the new official. If a vacancy happens mid‑year, remaining funds must go to the fiscal court as excess fees. The fiscal court must then provide the same amount to the successor for official use as soon as possible.

Recording fees support affordable housing

When an instrument up to 5 pages is recorded, the $33 fee is split. The county clerk keeps $27 and $6 goes to the Affordable Housing Trust Fund. When a real estate mortgage up to 30 pages is recorded, the $63 fee is split the same way: $57 to the clerk and $6 to the Trust Fund. Clerks must remit the $6 within 10 days after each quarter and file a summary report to the Kentucky Housing Corporation.

County clerk and sheriff audits

The Auditor audits county clerks and sheriffs each year and must include motor‑vehicle and motorboat fees, usage tax, and ad valorem tax receipts. Clerks must send that motor‑related audit part to the Revenue Department and the Transportation Cabinet. A county or official can hire a CPA instead and notify the Auditor; the Auditor will not duplicate that audit. The Transportation Cabinet pays the share of audit costs tied to motor‑vehicle and motorboat receipts. Each county clerk is audited yearly on motor‑related collections. A prior statute that separately required that specific annual motor audit is repealed; audits continue under these updated rules. The Auditor may also allow an agreed‑upon procedures review for eligible clerks and sheriffs.

Most changes start July 2027

Sections 1, 2, 3, 4, and 8 of this Act take effect July 1, 2027.

Simpler review option for SPGEs

Beginning with fiscal years that start July 1, 2027, eligible special-purpose local districts may choose an agreed‑upon procedures review instead of a full audit. To qualify, they must have followed the rules last year, have no recent special exams, and have under $15,000,000 in total receipts and spending for the year. They must certify within 30 days after year end and the state may object within 30 days. Reviews must follow AICPA and Auditor standards, cover key items like cash, debt, payroll, and budget limits, and be done within 12 months. The Auditor sets the procedures and may require extra steps.

Tiered audits for local districts

Special-purpose local districts must follow tiered audit rules. The law uses the higher of annual receipts or spending to set the tier. Under $500,000 needs an annual statement and an attestation every four years. $500,000 to under $1,000,000 needs an audit every four years. $1,000,000 or more needs a yearly audit, with a chance to move to a lighter schedule after two clean audits. Area planning commissions and sanitation districts must follow these standards and file required copies. The Auditor may audit any special-purpose district, and the district pays the audit cost.

Who counts as a local entity

Starting July 1, 2027, the law clarifies which groups are special‑purpose local governments and which are not. It includes some nonprofits and interlocal bodies if they meet the chapter’s tests, and excludes cities, counties, school districts, certain small fire groups, some public housing authorities, and more. It defines a "private entity" as one that only gets public money from contracts or grants, and excludes city‑ or county‑created bodies or boards with government appointees. It also defines a federally regulated municipal utility. Some utility pass‑through charges (like fuel and environmental surcharges under base‑rate formulas) are not treated as "fees."

Sponsors & Cosponsors

Sponsor

Matt Nunn
Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 172 • No: 0

House vote • 4/15/2026

3rd reading, passed

Yes: 97 • No: 0

Senate vote • 4/15/2026

passed

Yes: 37 • No: 0

Senate vote • 3/10/2026