Most of the more than 140 bills passed by the General Assembly during the 2025 legislative session are now in effect as of Friday, June 27. Under the Kentucky Constitution, most laws take effect 90 days after the legislature adjourns unless stated otherwise. This year, adjournment was March 28.
Senate leaders joined representatives of the state's constitutional offices this week for a press conference to review newly enacted laws and affirm their readiness to convene a special session, should the Governor call for one, to provide additional support to communities impacted by the deadly May 16 tornado.
Senate President Robert Stivers commented that Gov. Andy Beshear currently has $200 million available to respond to the need over the next six months. Stivers has asked state budget staff for related data as they receive it.
Here are the laws taking effect that are most impactful for counties. For more details on 2025 legislation, download KACo's 2025 session wrap-up.
County road funding - HJR 46 lists the county roads that will receive funding from the $23.9M in the County Priority Projects Program (CPPP).
Local Assistance Road Program - HB 546 - This new program will replace the County Priority Projects Program (CPPP) going forward.
- The application process will remain the same as the CPPP process but will require a 10-20% local match based on the same population rankings established for the Kentucky Product Development Initiative.
- The bill requires the Transportation Cabinet to develop a scoring system to rank projects 1 to 10, with 10’s representing the highest need, based on these factors: preservation of assets (physical condition), safety, cost, traffic volume and priority ranking within the highway district.
Allowance of electronic payments by counties - HB 555 allows county treasurers to make payments of approved expenses using electronic funds transfers (EFTs) and utilize electronic signatures to meet signature requirements for these payments. Expands eligible expenses to be adopted through standing orders to include payments to vendors that regularly provide services to the county.
State income tax reduction - HB 1 will cut Kentucky’s income tax rate from 4% to 3.5% beginning next year as part of a long-term effort to gradually reduce and eliminate Kentucky’s income tax.
Annual revenue bill HB 775 -
- Creates smaller state income tax triggers to allow the legislature the option to decrease the rate in smaller increments going forward. Currently the state triggers must hit the revenue to decrease the income tax by 0.5% or there is no decrease in the tax. This bill will allow between 0.1% and 0.5% reductions in the income tax rate depending on what level of revenue trigger is hit.
- Amends the bourbon barrel tax language to shift the basis of the phaseout of the local tax from the tax rate to the assessed value of the distilled spirts. The phaseout dates and percentages remain the same.
- Permanently clarifies that utility pipelines are assessed as real property. Prior legislation to clarify the issue limited the fix to property assessed on Jan. 1, 2024 and Jan. 1, 2025.
- Expands the eligibility for the qualified data center project incentive that was established in 2024 for one county, to projects in all counties. The incentives were previously only eligible for projects in Jefferson County.
CERS retiree health insurance - *Some provisions have a delayed effective date, as noted below. SB 10 balances the intent of the original legislation to cover the cost of a single plan for retirees while recognizing that healthcare costs have risen significantly since implementation in 2003.
- Creates a “shared responsibility model” between employer and employee.
- Increases the health insurance subsidy benefit for CERS members who began participating on or after July 1, 2003, from $10 to $40 a month per year of service for non-hazardous and from $15 to $50 a month for hazardous duty. Subsidies are payable beginning Jan. 1, 2026.
- Increases the insurance contribution rate for insured hazardous CERS employees from 1% of pay to 2% of pay, effective July 1, 2026.
- Allows the new contribution amounts to apply retroactively to service earned prior to the effective date.
- Provides for annual increases of 1.5% for hazardous duty employees, effective Jan. 1, 2026. These increases are only payable when a member is not eligible for Medicare benefits and only if they have met certain year-of-service thresholds at retirement.
Street-legal special purpose vehicles - SB 63 permits local governments to adopt ordinances allowing the operation of street-legal special purpose vehicles on highways within the local government’s jurisdictional boundaries and adopt more stringent local regulations than the state. Click here for more details including a link to a model ordinance. Click here to register for our July 9 webinar on this bill when KACo’s Rich Ornstein, bill sponsor Sen. Brandon Storm and Anderson County Clerk Jason Denny will be available to answer your questions.
Third party drivers licensing - SB 43 requires the Transportation Cabinet to issue administrative regulations to establish procedures for third-party entities to apply to serve as application processors for driver’s licenses and personal identification cards. The third-party entity would be required to collect and remit all current licensing fees to the Transportation Cabinet, but they could charge and retain an additional fee for providing the service. Requires a report to be submitted to the Interim Joint Committee on Transportation by Oct. 31, 2025 on the technological and budgetary requirements of expanding access for instructional permit testing and identity document issuance.
- "Third-party entity" is defined as “a person or entity, including but not limited to a business entity or nonprofit member association, that has received approval from the cabinet to process identity documents in accordance with this section; and does not include any governmental entity other than the (Transportation) cabinet.”
Medicaid supplemental payment program for ambulance services - HB 152 creates a new Medicaid supplemental payment program for public ground ambulance providers to take effect Jan. 1, 2026. Ground ambulance providers owned or operated by counties, cities and special districts are eligible to participate. The program is voluntary and allows these providers to receive additional federal funding for Medicaid transports if they pay the state Medicaid match for the supplemental program and an administrative fee retained by the Department of Medicaid Services.
EMS certificate of need - HB 305 prohibits the Kentucky Board of Emergency Medical Services (KBEMS) from requiring an ambulance service to apply for licensure within a specified time period following the issuance of a certificate of need but allows KBEMS to require progress reports on a six-to-twelve-month basis.
It also will allow the measures established in HB 777 from the 2022 legislative session to continue without a sunset, which had created a non-substantive review process for certificate of need proposals for ambulance services owned by counties, cities and hospitals.
Non-emergency transportation services - SB 27 allows hospitals and skilled nursing facilities that operate a non-emergency medical transportation service to transport a resident from a hospital to a skilled nursing facility. The contracted provider must be given the opportunity to transport prior to the facility providing such services. If the hospital or skilled nursing facility provides the transport, it would not be eligible for Medicaid reimbursement.
Continuous elections improvement - HB 684 continues the efforts of county clerks to elevate both the integrity of Kentucky’s elections and seek process improvements for the voting public and their offices.
Regional economic development districts - HB 606 allows local governments in two or more counties to enter into an interlocal agreement for development of real estate consisting of 300 or more acres to form a regional economic development project resulting in at least 500 new jobs.
Water and wastewater approved projects - HJR 30 lists the approved projects qualifying for the Kentucky Water or Wastewater Assistance for Troubled or Economically Restrained Systems (KWWATERS) funding.
Petition to remove squatters - HB 10 establishes a procedure for property owners to submit a petition to a law enforcement officer to remove a person unlawfully occupying real property.
Alcoholic beverage control administrators - HB 437 limits the use of peace officer powers only to alcoholic beverage control administrators and investigators certified by the Kentucky Law Enforcement Council. Prohibits local governments from enacting ordinances prohibiting the sale of alcohol by the drink between 6 a.m. and midnight on any day except Sunday.
Planning and zoning - HB 321:
- extends the time for planning commissioners and board of adjustment members to receive orientation training to up to one year following appointment.
- requires appointees and planning and zoning employees to receive at least one hour of training related to housing supply and accessibility.
- limits appeals of planning and zoning actions to persons or entities claiming to be injured or aggrieved that own real property within the same zone where the property that is subject to the action is located.
