On August 8, 2016, Kentucky Governor Matthew Bevin issued Executive Order 2016-576 to reorganize and consolidate the Kentucky Board of Tax Appeals (BTA), the Crime Victims Compensation Board (CVCB) and the Board of Claims (BOC) into a single review board to be known as the new Kentucky Claims Commission (Commission). The new Commission becomes effective on October 1, 2016. As part of its responsibilities, the Commission will hear and determine appeals from final rulings, orders and determinations of any state or county government agency affecting revenue and taxation. Current BTA related regulations as well as previous orders by the BTA will remain in force. According to Governor Bevin, this reorganization is being done to "create a streamlined process for citizens to have their claims and appeals heard" and to create efficiency and cost savings for the state.

Governor Bevin appointed three members to serve on the CVCB. These three members also will serve as the members of the BTA and the BOC through September 30, 2016. The terms of the current members serving on the BTA expired immediately upon the Governor's issuance of the executive order. The new board members along with current staff are tasked with determining the best procedures for transitioning current functions, records and cases of these boards to the new Commission.

Effective October 1, 2016, the Commission is established as an independent agency of the state. The Commission will consist of three members appointed by the Governor and approved by the Senate. The members will serve for a term of three years, except for the members first appointed. The Executive Order establishing the Commission requires that at least one member must be a crime victim, a family member of a crime victim, or a victim advocate. In addition to hearing tax appeals, the Commission will promulgate administrative regulations, including those establishing hearing procedures and a dollar threshold to be heard before the full Commission as opposed to a hearing before a single member or employee. The Commission will also make available to the public all decisions and opinions, administrative regulations, written statements of policy, and interpretations formulated, promulgated or used by it in discharging its functions.

In addition, and to the extent not inconsistent with the Executive Order, all duties, functions, responsibilities, records, equipment, staff and supporting budgets of the BTA will transfer over to the Commission. Further, current BTA related regulations, as well as previous orders by the BTA, will remain in full force and effect, unless inconsistent with the Executive Order.

Implications

Taxpayers that currently have cases pending before the BTA should monitor this transition to the new Commission to ensure that their records are properly transferred from the BTA for hearing. Taxpayers should also consider their procedural options. For instance, taxpayers may consider waiting to file a request for final ruling from the Department of Revenue or a protest of a final ruling from the Department of Revenue until the new Commission's authority becomes effective. Alternatively, taxpayers also may want to consider reaching out to the Kentucky Department of Revenue to try and settle the matter.

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