Kentucky is known for its hollers and hamlets.

Policy wonks like to call them unincorporated areas, meaning they have no local government.

As Kentucky editions June Lefler reports, Kentucky lawmakers hope to change what cities and counties can get out of these unincorporated areas.

Kentucky lawmakers have debated annexation in recent years.

That's the process where cities grow by bringing unincorporated land and residents into their fold.

Last year, state lawmakers put a pause on most annexations, saying the whole process had to be overhauled.

Current law arguably makes cities winners and counties losers.

Counties offer unincorporated communities some services and in turn get some taxes.

But when cities annex unincorporated lands, they take much of those taxes.

Counties have been counting on.

State lawmakers say House Bill 596 would give many counties more say in the process and their fair share of tax revenues.

For ten years.

The city shall guarantee the county will increase.

We'll see increased revenue from the annexed property equal to or higher than 100% of the property tax, 150% of the occupational tax, and 150% of the insurance tax unless otherwise agreed by the city and the county.

The bill advanced unanimously out of the House Local Government Committee.

You know, a comment was made to me over the weekend that kind of summed it up perfectly.

I thought, you know, a judge had said I'd hoped for more, but I'd expected less.

And so I think you've done a phenomenal job on this.

It threads the needle appropriately.

Just what's going on across the state.

We know that counties and cities that work together already that have those in our local agreements already are the ones that are more prosperous than the others.

And so providing the framework to kind of get to the spot to where we have more interlocal agreements, more communications amongst counties and cities, I think you've done a phenomenal job.

We're not all maybe happy, but we all got to a product that we could all live with as of today, and I think it's something that we can be proud of.

I appreciate each of you for the work that you've done, and I'm glad that we're moving forward.

Both the Kentucky League of Cities and the Kentucky Association of Counties support the bill for Kentucky.

Edition of June.

LEFFLER Thank you, June.

According to the 2020 U.S. Census, 44% of Kentucky live in unincorporated areas.