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Bill

SB 255

AN ACT relating to rural revitalization.

2026 Regular Session Introduced by Steve Meredith

Creates a Rural Kentucky Revitalization program with a public-private Partnership to invest in rural areas, offering incentives, governance, and revenue pledges to spur long-term g

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Bill Summary · SB 255

Overview

SB 255 (2026 Reg. Session, Kentucky) establishes a Rural Kentucky Revitalization program and creates a public-private partnership—the Rural Kentucky Revitalization Opportunity Partnership—to restore and invest in a defined rural revitalization area. The measure aims to accelerate economic growth, improve health and education outcomes, expand housing and basic services, and empower rural communities to become equal partners with urban areas.

Main purpose and intent

  • Declare and define a rural revitalization area based on Rural-Urban Continuum Codes 4–9 (aligned with USDA designations).
  • Promote public-private collaboration to invest in long-term community well-being and economic growth.
  • Enable targeted projects that address income, education, health, unemployment, housing, childcare, environment, and overall quality of life.
  • Position rural areas as equal partners with urban areas for future Commonwealth prosperity.

Key provisions and changes

  • Creation of the Rural Kentucky Revitalization Opportunity Partnership (the board) as a public body corporate and politic.

    • Purpose: manage investments, issue bonds, receive grant/loan proceeds, and oversee project development areas within the revitalization region.
    • Operating guidelines: board powers include hiring, contracts, bylaws, borrowing, investing, loans, and project planning.
    • Governance: initial 20-member board (mix of local government leaders, university representatives, regional partners, and Governor-appointed members including a banker, a foundation representative, a Fed board representative, and chamber of commerce officials). Term lengths and a rotating, self-perpetuating structure after initial appointments.
    • Nonvoting ex officio members: area development district leaders, and secretaries from Economic Development, Agriculture, and Health and Family Services.
    • Quorum and conflict rules; mandatory board training on development, equity, and gentrification topics.

  • Local funding mechanism and revenue pledges.

    • Beginning the year after initial private funds are invested, 85% of incremental revenues from local and state sources within a project development area are pledged to the Partnership for 20 years.
    • Establishment of local participation agreements detailing revenue pledges, project benefits, default remedies, activation/termination dates, and superpriority status over other revenue pledges.

  • Project development areas and advisory council.

    • The board can create project development areas and invest in neighborhood-led initiatives (including affordable housing).
    • An advisory council (subcommittee of the Partnership) comprises regional development district reps and other specified organizations (e.g., Volunteers of America, Foundation for a Healthy Kentucky, Central Kentucky Community Action Council) to guide economic development and housing goals.

  • Property tax and revitalization credit (Section 8).

    • Creation of a rural Kentucky revitalization tax credit tied to increases in residential property tax within project development areas.
    • Credit is refundable and nontransferable, equal to the excess of current-year property tax paid over the January 1, 2026 assessment.
    • Credit duration ends upon sale of the property or the end of the incremental revenue period.
    • The Department must report annual, property-specific credit data to the General Assembly beginning no later than November 1, 2028, for ongoing evaluation.

  • Tax credit sequencing and administrative provisions (Section 9).

    • Specifies priority for applying various nonrefundable and refundable credits against state and local taxes when multiple credits are claimed.
    • Ensures orderly application of credits, including the rural revitalization credit as a last listed refundable credit.

  • Administrative and reporting requirements (Sections 6 and 7).

    • The Partnership maintains separate accounts for bond proceeds, incremental revenues, and debt service.
    • Biennial reporting to the Legislative Research Commission on finances, projects, investments, and board composition, starting by August 1, 2027.

Who is affected

  • Local governments (cities and counties) within the defined revitalization area.
  • Property owners in the project development areas (potential eligibility for the new tax credit).
  • Residents and employers in rural areas benefiting from workforce, housing, health, and educational initiatives.
  • The Kentucky government and state agencies involved in tax administration and budgetary decisions.
  • Private investors and financial institutions participating in funding revitalization projects.

Procedural and timeline notes

  • The bill creates new entities and a framework for governance, funding, and oversight.
  • Initial board appointments and terms are defined; after term expirations, the board becomes self-perpetuating with term limits.
  • Incremental revenue pledges are 85% for 20 years, commencing after initial private funds are received.
  • Biennial reporting to the Legislature begins no later than August 1, 2027, and continues in odd-numbered years thereafter.
  • The rural revitalization credit data reporting starts by November 1, 2028, and continues as long as credits are claimed.

This summary presents SB 255 as a comprehensive rural revitalization package combining governance, finance, incentives, and oversight to catalyze long-term growth in Kentucky’s rural areas.

Compiled from official sources — confirm details with the bill’s official record.

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