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HB 835

AN ACT relating to the New Markets Development Program tax credit.

2026 Regular Session Introduced by J.T. Payne

The bill strengthens and refines the New Markets Development Program tax credit to boost private investment in underserved Kentucky areas, directing capital for job creation and co

to Appropriations & Revenue (H)
#taxation #income--corporate #income--individual
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Bill Summary · HB 835

Overview

HB 835 is a Kentucky bill introduced in the 2026 Regular Session that relates to the New Markets Development Program (NMDP) tax credit. The bill appears to modify aspects of the NMDP tax credit to align with state economic development goals, targeting investment in underserved or economically distressed areas, job creation, and long-term community benefits. The measure has progressed to the Appropriations & Revenue Committee as of March 10, 2026, after introduction on March 3, 2026.

Purpose and intent

  • To modify or clarify the New Markets Development Program tax credit within Kentucky’s tax code.
  • To promote private investment in underinvested regions by leveraging the state tax credit to spur economic development, job creation, and capital deployment in targeted communities.
  • To establish or adjust program parameters to ensure effectiveness, accountability, and alignment with state fiscal and economic objectives.

Key provisions and changes (as outlined by the bill’s general intent)

Note: Because the exact statutory text is not provided here, the following items reflect typical areas addressed in updates to NMDP-related tax credits. Refer to the bill’s specific language for precise changes.

  • Eligibility criteria: Possible adjustments to which projects or investments qualify for the NMDP credit (e.g., minimum investment thresholds, types of activities, or geographic targeting within Kentucky).
  • Credit amount and calculation: Potential changes to the credit percentage, cap per project, total program limit, carryforward provisions, or refundable vs. nonrefundable status.
  • Allocation process: Updates to how credits are allocated or awarded (e.g., application deadlines, scoring criteria, annual limits, or competitive vs. noncompetitive allocation).
  • Compliance and reporting: Strengthened reporting, monitoring, and annual reporting requirements to the Department of Revenue or an overseeing agency; additional audit or clawback provisions if requirements aren’t met.
  • Interaction with other incentives: Provisions detailing how the NMDP credit interacts with other state or federal incentives, including whether credits can be stacked or are mutually exclusive.
  • Sunset and reevaluation: Whether the bill extends, revises, or clarifies the sunset date of the NMDP credit and triggers for reevaluation of program effectiveness.
  • Administrative authority: Clarifications on the administering agency’s authority, rulemaking, and staff resources needed to implement changes.

Who is affected

  • Taxpayers and investors who participate in or qualify for the New Markets Development Program credit.
  • Businesses seeking capital in economically distressed or targeted Kentucky regions.
  • Local governments and communities in areas designated as economically distressed or targeted for development.
  • State revenue and economic development agencies responsible for administering the credit, reporting, and oversight.

Procedural and timeline aspects

  • Introduction: March 3, 2026.
  • Committee route: Referred to Committee on Committees (H) on March 3, 2026.
  • Budgetary/appropriations consideration: Referred to Appropriations & Revenue (H) on March 10, 2026, indicating potential consideration of fiscal implications and funding authority.
  • Next steps: If advanced, the bill would move through additional committee hearings, potential amendments, and floor votes in the House, followed by consideration by the Senate and eventual enactment or modification into law.

Potential impact and considerations

  • Fiscal impact: Depending on the final text, the bill could affect state revenue through changes to the value, allocation, or duration of the NMDP tax credits; the Appropriations & Revenue committee action suggests attention to fiscal sustainability.
  • Economic impact: Aims to mobilize private investment in underserved areas, potentially increasing job creation, capital projects, and community revitalization.
  • Oversight and accountability: Likely introduces or tightens reporting, compliance, and potential clawback provisions to ensure credits produce intended outcomes.

For a precise understanding, the exact statutory language and any fiscal notes or committee amendments should be reviewed once publicly available.

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

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