FRANKFORT, Ky. (WYMT/WKYT) - State Senator Johnny Ray Turner pre-filed a bill to close a loophole in the tax code.
With the way it currently stands, Harlan County schools owe $73,000 to Revelation Energy, a sister company of Blackjewel.
The company overpaid a utility tax.
The school system might be on the hook to refund that money despite other delinquent Blackjewel taxes that would benefit the district.
On Wednesday at 9:30 a.m., Senator Turner pre-filed Bill Request 346. This bill would clear school districts of refunds owed if a company has outstanding taxes owed to the district.
"This glitch needs to be fixed," explained Senator Turner. "We already have offset conditions in place for our local governments and state government to avoid situations such as these and school districts should have that same option."
The Department of Revenue announced it would not seek repayment by the school district unless the court decides otherwise.
If a bankruptcy court orders the school system to pay back the $73,000 overpayment, Turner said it will hurt Harlan County.
"$73,000 is about equivalent to two teachers. So they would probably have to lose a couple of teachers in the school system," Turner said. "East Kentucky schools have been hit by a lot of things in recent years. Been hit by stagnant state funding, the loss of property values, loss of coal severance dollars and loss of jobs. We need to clarify this statute so they don't get hit again."