Commonwealth of Kentucky s66

Local Mandate Fiscal Impact Estimate Kentucky Legislative Research Commission 2012 Regular Session

Part I: Measure Information

Bill Request #: 78

Bill #: HB 122

Bill Subject/Title: residential care facilities and local ordinances

Sponsor: Rep. Carl Rollins

Unit of Government: x City x County x Urban-County Unified Local x Charter County x Consolidated Local x Government

Office(s) Impacted Any unit of a local government that has adopted an ordinance placing a license or other requirement on residential care facilities as defined under the measure and that exceeds those required by state or federal law or regulations.

Requirement: x Mandatory Optional

Effect on Powers & Duties x Modifies Existing Adds New x Eliminates Existing

Part II: Purpose and Mechanics

Under current state planning and zoning laws, a residential care facility for persons with disabilities may be operated in any residential district, zone, or subdivision subject only to compliance with the same specified limitations as apply to other residences in the district, zone, or subdivision. A conditional use permit is not required. A “residential care facility” is defined as a residence operated and maintained by a sponsoring private or governmental agency to provide services in a homelike setting for persons with a disability. The disability may be physical, emotional, or mental (KRS 100.982 and 100.984).

Under the measure as introduced, current planning and zoning “residential care facility” statutes (KRS 100.982 and 100.984) are not amended. However, the term is modified in a new section of KRS Chapter 65 (relating to general provisions applicable to counties, cities, and other local units). A “residential care facility” is defined as a residence, including a group home1 or 1 Group homes are licensed by the Cabinet for Health and Family Services, Office of Inspector General under 902 KAR 20:078 and are funded under the Medicaid waiver Supports for Community Living Program and may not serve less than four nor more than eight persons with mental retardation or developmental disabilities. There is a fee for licensure.

staffed residence2, operated and maintained by a private agency receiving state or federal funds; or a governmental agency providing services in a homelike setting for persons with disabilities. In addition, local governments would not be allowed to place a license or other requirements on any residential care facility beyond those required by current state or federal statutes or administrative regulations.

The service goal for the supports for community living initiatives is to provide an option to placement of an individual in more restrictive institutional care. According to state Cabinet for Health and Family Services Medicaid billing data, statewide there are 2,199 disabled persons living in staffed residences, 665 persons living in adult foster care homes, and 82 group homes that serve persons with a disability under the broad category of “residential care facility”. Data is not readily available as to the precise number of residential care facilities for each city and county, and the Cabinet reports that no city or county operates a residential care facility. Residential care facilities are located in every Area Development District of the Commonwealth.

Thus, if HB 122 were enacted and upon implementation, any local government with a license or other requirement governing residential care facilities for persons with disabilities and that was enacted as an ordinance and which contains regulatory policies exceeding that required by state or federal statutes or administrative regulations would be required to repeal it. Local governments would also be prohibited from adopting more restrictive land use or health and safety or occupational taxation requirements for residential care facilities or their employees. Any repeal of a current ordinance would require action by any enacting local governing body such as a fiscal court or urban-county council.

Part III: Fiscal Explanation, Bill Provisions, and Estimated Cost

The overall fiscal impact of HB 122 on local governments is expected to range from minimal to moderate. While the provisions of the bill make significant changes to local government’s ability to regulate and tax these specific local businesses and employees, the number of businesses affected statewide is not large (see the Cabinet for Health and Family Services Medicaid billing data in Part II above). Any city or county with a number of residential care facilities, that have adopted local revenue measures or land use policies that exceed those required by current state or federal statutes or administrative regulations, could experience loss of tax revenue and loss of local decision making. For other cities and counties the impact would be minimal.

According to the Kentucky League of Cities: Our legal department has reviewed HB 122 and believes it could have major implications on both revenue and local land use.

Effect on local revenue

2 Staffed residences are certified by the Cabinet for Health and Family Services, Department of Behavioral Health, Division of Developmental and Intellectual Disabilities under 907 KAR 1:145 and are funded under the Medicaid waiver Supports for Community Living Program. The residences can house up to three people each. There is no fee for certification.

Regarding the former, we are concerned that the language could be construed to prohibit the imposition of an occupational license tax on the private businesses that operate residential care facilities. If so, that could result in a significant loss of tax revenue for a city while services are still being used by the facility. This would be a significant incursion on local decision making by restricting the revenue options available to cities.

Effect on land use As for land use, local decisions regarding such things as zoning, safety, and over- occupancy would likely be preempted. Here are a few examples that we are aware of:

 Louisville and the larger cities in Jefferson County have adopted the land development code for the entire county, which includes zoning conditions for residential care facilities. Some of these conditions may be affected by HB 122.

 Bowling Green has an ordinance regarding fire safety that applies to care facilities.

 We also are aware of this in Bowling Green regarding over-occupancy: A housing unit in a single family residential zoning district may only be occupied by one family. A family can be (1) any number of people related by blood, marriage, adoption or guardianship; (2) two unrelated people and any children related to either of them; or (3) not more than eight people living in a residential care facility.

The Kentucky Association of Counties did not have data available on which counties currently regulate residential care facilities and did not see a significant financial impact either way.

If the measure is enacted and upon its implementation, local governing bodies with ordinances containing policies that exceed state or federal statutes or administrative regulations governing residential care facilities would be required to repeal those. Costs would include the time and expense of drafting an ordinance, advertising the proposed ordinance provisions, placing the proposed ordinance on the business docket for necessary action, and printing the ordinance.

Data Source(s): Kentucky League of Cities; Kentucky Association of Counties; Cabinet for Health and Family Services, Department of Behavioral Health, Division of Developmental and Intellectual Disabilities; Kentucky Association of Regional Programs ; Cabinet for Health and Family Services, Office of the Inspector General.

Preparer: Dianna McClure Reviewer: Date: