HB 757 — AN ACT relating to revenue measures and declaring an emergency.

(l) Exclude all military pay received by members of the Armed Forces while on Page 25 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO active duty;

and Page 26 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (t) Include interest deducted under 26 U.S.C.

CHAPTER 161 13 (d) Any deduction allowed by 26 U.S.C.

(h) Any deduction allowed for amounts paid to any club, organization, or establishment which has been determined by the courts or an agency established by the General Assembly and charged with enforcing the civil rights laws of the Commonwealth, not to afford full and equal membership and full and equal enjoyment of its goods, services, facilities, privileges, advantages, or accommodations to any person because of race, color, religion, national origin, or sex, except nothing shall be construed to deny a deduction for amounts paid to any religious or denominational club, group, or establishment or any organization operated solely for charitable or educational Page 27 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO purposes which restricts membership to persons of the same religion or denomination in order to promote the religious principles for which it is established and maintained;[ and] (i) A taxpayer may elect to claim the standard deduction allowed by KRS 141.081 instead of itemized deductions allowed pursuant to 26 U.S.C.

(d) Exclude fifty percent (50%) of gross income derived from any disposal of coal covered by Section 631(c) of the Internal Revenue Code if the Page 28 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO corporation does not claim any deduction for percentage depletion, or for expenditures attributable to the making and administering of the contract under which such disposition occurs or to the preservation of the economic interests retained under such contract;

9009c, related to the tax treatment of the grants, deductions attributable to those grants, and tax attributes associated with those grants;[ and Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY ] (j) For taxable years beginning on or after January 1, 2026:

(k) Include the amount deducted for any qualified film or television production, Page 29 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO any qualified live theatrical production, and any qualified sound recording production under 26 U.S.C.

276 and 278, related to the tax treatment of forgiven covered loans and Page 30 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO deductions attributable to those loans for taxable years ending on or after March 27, 2020, but before January 1, 2022;

PageCHAPTER 31161 of15 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO a.

The increase in the net deferred tax liability, decrease in the net deferred tax asset, or the aggregate change from a net deferred tax asset to a net deferred tax liability shall be computed based on the Page 32 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO change that would result from the imposition of the combined reporting requirement under KRS 141.202, but for the deduction provided under this paragraph as of June 27, 2019.

Any combined group intending to claim a deduction under this paragraph shall file Page 33 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO a statement with the department on or before July 1, 2019.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (b) "Athlete":

Page 34 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO b.

On the score, point spread, or outcome of a single real-real-world Page 35 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO world team or combination of teams;

CHAPTER 161 17 1.

(2) Beginning on January 1, 2027, the Commonwealth shall impose and collect a tax at a rate of twelve percent (12%) of the fantasy contest service provider's adjusted Page 36 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO gross fantasy contest receipts.

Page 37 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO As used in this chapter, unless the context otherwise provides:

and Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY h.

Page 38 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (3) "Business" includes any activity engaged in by any person or caused to be engaged in by that person with the object of gain, benefit, or advantage, either direct or indirect;

(b) "Digital audio works" includes ringtones, recorded or live songs, music, readings of books or other written materials, speeches, or other sound Page 39 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO recordings.

or CHAPTER 161 19 2.

Page 40 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 6.

(b) "Executive employee recruitment services" includes but is not limited to making a detailed list of client requirements, researching and identifying Page 41 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO potential candidates, performing prescreening interviews, and providing contract and salary negotiations;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY 3.

(18)[(17)] (a) "Gross receipts" and "sales price" mean the total amount or Page 42 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO consideration, including cash, credit, property, and services, for which tangible personal property, digital property, or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for any of the following:

The retailer has an obligation to pass the price reduction or discount Page 43 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO through to the purchaser;

CHAPTER 161 21 2.

Page 44 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 3.

Page 45 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 1.

Page 46 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO a.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY b.

(25)[(24)] "Marketplace" means any physical or electronic means through which one (1) Page 47 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO or more retailers may advertise and sell tangible personal property, digital property, or services, or lease tangible personal property or digital property, such as a catalog, internet website, or television or radio broadcast, regardless of whether the tangible personal property, digital property, or retailer is physically present in this state;

Provides a marketplace for making retail sales of tangible personal property, digital property, or services, or otherwise facilitates retail sales of tangible personal property, digital property, or services, regardless of ownership or control of the tangible personal property, digital property, or services, that are the subject of the Page 48 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO retail sale;

CHAPTER 161 23 f.

Through terms and conditions, agreements, or arrangements with a third party, collects payment in connection with a retail sale of tangible personal property, digital property, or services from a purchaser and transmits that payment to the marketplace retailer, regardless of whether the person collecting and transmitting the payment receives compensation or other consideration in exchange Page 49 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO for the service;

(b) For the purposes of this subsection, stockholders, bondholders, partners, or other persons holding an interest in a corporation or other entity are regarded as having the "real or ultimate ownership" of the tangible personal property or Page 50 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO digital property of such corporation or other entity;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (c) "Other direct mail" does not include the development of billing information or the provision of any data processing service that is more than incidental to the production of printed material;

Image editing, including shadow removal, tone adjustments, vertical and horizontal alignment and cropping, composite image creation, formatting, watermarking printing, and delivery of an original Page 51 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO photograph in the form of tangible personal property, digital property, or other media.

Page 52 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) The combining of two (2) or more prewritten computer software programs or portions thereof does not cause the combination to be other than prewritten computer software;

When performed outside this state or when the customer gives a resale certificate, the producing, fabricating, processing, printing, or imprinting of tangible personal property for a consideration CHAPTER 161 25 for consumers who furnish either directly or indirectly the materials used in the producing, fabricating, processing, printing, or imprinting;

A transfer for a consideration of the title or possession of tangible Page 53 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO personal property or digital property which has been produced, fabricated, or printed to the special order of the customer, or of any publication;

Any person conducting a race meeting under the provision of KRS Page 54 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Chapter 230, with respect to horses which are claimed during the meeting.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY a.

Page 55 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO b.

and Page 56 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 3.

(49)[(48)] "Telemarketing services" means services provided via telephone, facsimile, electronic mail, text messages, or other modes of communications to another Page 57 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO person, which are unsolicited by that person, for the purposes of:

or CHAPTER 161 27 3.

or Page 58 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 2.

Admissions to enter the grounds or enclosure of any track licensed under KRS Chapter 230 at which live horse racing or historical horse racing is being conducted under the jurisdiction of the Kentucky Horse Page 59 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Racing and Gaming Corporation;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (d) Prepaid calling service and prepaid wireless calling service;

(i) Small animal veterinary services, excluding veterinary services for equine, Page 60 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO cattle, poultry, swine, sheep, goats, llamas, alpacas, ratite birds, buffaloes[buffalo], and cervids;

and Page 61 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 5.

CHAPTER 161 29 (z) Bodyguard services;

(ap) Body modification services, including tattooing, piercing, scarification, branding, tongue splitting, transdermal and subdermal implants, ear pointing, Page 62 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO teeth pointing, and any other modifications that are not necessary for medical or dental health;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (1) Excluded from the additional taxable services imposed by KRS 139.200(2)(q) to (ax) are gross receipts derived from:

Page 63 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (a) Sales of the services in fulfillment of a lump-sum, fixed-fee contract or a fixed price sales contract executed on or before February 25, 2026;

(2) A service included in KRS 139.200(2)(a) to (f) unless the person takes from the purchaser a certificate to the effect that the service is purchased through a fully completed certificate of exemption or fully completed Streamlined Sales and Use Page 64 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Tax Agreement Certificate of Exemption in accordance with KRS 139.270;

CHAPTER 161 31 (1) Except as provided in KRS 139.470 and 139.480, every retailer engaged in business in this state shall collect the tax imposed by KRS 139.310 from the purchaser and give to the purchaser a receipt therefor in the manner and form prescribed by the department.

(2) "Retailer engaged in business in this state" as used in KRS 139.330 and this section Page 65 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO includes any of the following:

(d) Any retailer deriving receipts from the lease or rental of tangible personal Page 66 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO property situated in this state;

(f) Any retailer located outside Kentucky that uses a representative in Kentucky, either full-time or part-time,part- time, if the representative performs any activities that help establish or maintain a marketplace for the retailer, including receiving or exchanging returned merchandise;

of this paragraph shall register for a sales and use tax permit and collect the tax imposed by KRS 139.310 from the purchaser Page 67 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO no later than the first day of the calendar month that is at the most sixty (60) days after the[either] threshold is reached.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (1) Gross receipts from the sale of, and the storage, use, or other consumption in this state of, tangible personal property or digital property which this state is prohibited from taxing under the Constitution or laws of the United States, or under the Constitution of this state;

Page 68 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (5) Gross receipts from sales of tangible personal property sold through coin-operated bulk vending machines, if the sale amounts to fifty cents ($0.50) or less, if the retailer is primarily engaged in making the sales and maintains records satisfactory to the department.

"Place of domicile" means the place where an individual has his or her Page 69 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO legal, true, fixed, and permanent home and principal establishment, and to which, whenever the individual is absent, the individual has the intention of returning.

(e) The exemption shall apply also to residential property which may be held by legal or equitable title, by the entireties, jointly, in common, as a condominium, or indirectly by the stock ownership or CHAPTER 161 33 membership representing the owner's or member's proprietary interest in a corporation owning a fee or a leasehold initially in excess of ninety-eight (98) years if the sewer services, water, and fuel are purchased for and declared by the Kentucky resident as used in his or her place of domicile;

Distilled spirits or wine at a plant facility or on the premises of a Page 70 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO distiller, rectifier, winery, or small farm winery licensed under KRS 243.030 that includes a retail establishment on the premises;

This group is limited to hand tools such as jigs, dies, drills, cutters, rolls, reamers, chucks, saws, and spray guns and to tools attached to a machine such as molds, grinding balls, Page 71 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO grinding wheels, dies, bits, and cutting blades.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (11) (a) 1.

Gross receipts from the sale of newspaper inserts or catalogs purchased for storage, use, or other consumption outside this state and delivered by the retailer's own vehicle to a location outside this state, or delivered to the United States Postal Service, a common carrier, or a contract carrier Page 72 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO for delivery outside this state, regardless of whether the carrier is selected by the purchaser or retailer or an agent or representative of the purchaser or retailer, or whether the F.O.B.

a.[1.]"Catalogs"a.[1.] "Catalogs" means tangible personal property that is printed to the special order of the purchaser and composed substantially of information regarding goods and services offered for sale;

and b.[2.]"Newspaperb.[2.] "Newspaper inserts" means printed materials that are placed in or distributed with a newspaper of general circulation.

Page 73 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) The retailer shall be responsible for establishing that delivery was made to a non-Kentucky location through shipping documents or other credible evidence as determined by the department;

Page 74 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (a) Sold to a Kentucky resident, registered for use on the public highways, and upon which any applicable tax levied by KRS 138.460 has been paid;

CHAPTER 161 35 (20) Gross receipts from the sale of a semi-trailer as defined in KRS 189.010(12) and trailer as defined in KRS 189.010(17);

Page 75 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (23) (a) For persons selling services included in KRS 139.200(2)(g) to (ax) prior to January 1, 2025, gross receipts derived from the sale of those services if the gross receipts were less than twelve thousand dollars ($12,000) during calendar year 2024.

(a) "Motor vehicle" means every vehicle intended primarily for use and operation on the public highways that is self-propelled, including a low-speed motor Page 76 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO vehicle as defined in KRS 186.010;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY a.

Page 77 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 3.

(c) The retailer shall be allowed to retain an amount equal to five percent (5%) of the fees due, provided the amount due is not delinquent at the time of Page 78 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO payment.

and CHAPTER 161 37 2.

(1) The cabinet shall report to the General Assembly no later than January 15 each year on the effectiveness of the waste tire program in developing markets for waste tires, the amount of revenue generated and the effectiveness of the fee established in KRS Page 79 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 224.50-868 in funding the cabinet's implementation of the waste tire program, to include any waste tire amnesty program established by the cabinet as provided for in KRS 224.50-880(1)(b), whether the fee should be extended, comparative data on the number of waste tires generated each year, the number disposed of, the number of orphan tire piles, and the cost of tire disposal by counties in the Commonwealth.

(1) During any biennium the amount allotted, from all sources, for expenditure on any project in the State Capital Construction Program for that biennium shall not exceed Page 80 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the estimated cost of the project during that biennium, as shown in any branch budget bill enacted by the General Assembly, except as provided in this section and KRS 45.770 and 45.780;[.] (2) When the General Assembly disapproves a capital project or item of equipment that was previously approved, it shall be eliminated as a capital project or major item of equipment in the Capital Projects Program.

Road fund moneys for a disapproved project or item that have been appropriated but unallotted or allotted but unexpended, shall be returned to the Road Fund Surplus Account;[.] (3) Capital projects and major items of equipment disapproved under subsection (2) of this section shall be terminated;[.] Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (4) During any biennium, the amount allotted from all sources for expenditure for the purchase of any major item of equipment shall not exceed the estimated cost of the item as shown in any branch budget bill enacted by the General Assembly and authorizing the purchase, except as provided in subsections (5) and (6) of this section and in KRS 45.770 and 45.780;[.] (5) A major item of equipment to be used for medical, scientific, or research purposes, excluding computer equipment and aircraft, may be authorized even though it is not specifically listed in any branch budget bill enacted for the current biennium, subject to the following conditions and procedures:

moneys Page 81 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO utilized shall not jeopardize any existing program and shall not require the use of any current general funds specifically dedicated to existing programs;

The submission shall Page 82 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO include a written certification to the committee that the transfer, in excess of five percent (5%)[fifteen percent (15%)] of the amount authorized by the General Assembly, is:

moneys utilized shall notCHAPTER jeopardize161 any39 Pagenot 83jeopardize ofany 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO existing program and shall not require the use of any current general funds specifically dedicated to existing programs;

The year in which the project or major item of equipment was approved, with specific reference to the legislation by which the project or item Page 84 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO was approved;

(2) Money in the capital construction and equipment purchase contingency account may be transferred to the allotment account of a capital construction project, Page 85 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO authorized by the General Assembly under KRS 45.760, subject to the following conditions and procedures:

(a) Except as provided in paragraphs (b) and (c) of this subsection, during any biennium, the amount that may be transferred from the capital construction and equipment purchase contingency account to the allotment account of an authorized project shall not exceed an amount equal to five percent (5%)[fifteen Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY percent (15%)] of the estimated cost of the project, for that biennium, approved by the General Assembly in the manner provided by KRS 45.760;[.] (b) Subject to paragraph (c) of this subsection, if the cost of an authorized project exceeds, by more than five percent (5%)[fifteen percent (15%)], its estimated cost, as approved by the General Assembly, due to an unforeseen decision by a federal or state court or regulatory agency, moneys in excess of five percent (5%)[fifteen percent (15%)] of the estimated cost of the project may be transferred from the capital construction and equipment purchase contingency account to the allotment account of the project;

(3) Money in the capital construction and equipment purchase contingency account may be transferred to the allotment account of a major item of equipment, Page 86 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO authorized by the General Assembly under KRS 45.760, for expenditure on that item subject to the following conditions and procedures:

(4) Money in the capital construction and equipment purchase contingency account may be transferred to a capital project account to be used for nonrecurring moving Page 87 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO expenses of state agencies to address issues of public health and safety or governmental efficiency, subject to the following conditions and procedures:

(a) If the project was a line item in the budget and not funded with road funds, then the balance shall be transferred to the capital construction surplus account;[.] (b) If the project was a line item in the budget and funded with road funds, then the balance shall be transferred to the road fund surplus account;[.] CHAPTER 161 41 (c) If the project was completed within the biennium in which it was authorized, and if the project was funded from a major maintenance pool, then the balance shall be transferred to that major maintenance pool;

or[.] (d) If the project was not completed within the biennium in which it was authorized, without being expressly reauthorized by a succeeding session of the General Assembly, then the balance shall be transferred to the capital Page 88 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO construction surplus account.

2.[(b)]2.[(b)]Debit Debit card;

4.[(d)]4.[(d)]Automated Automated clearinghouse (ACH) debit;

Page 89 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) As used in this subsection, "the nearest five cent ($0.05) increment" means:

and Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY 2.

Page 90 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (2) As used in this section, "the nearest five cent ($0.05) increment" means:

(3) Retailers that provide road and travel services that are taxable under KRS 139.200 Page 91 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO shall not be required to state the tax separately from the sales price if the retailer can establish and provide evidence that the sales tax has been added to the total amount of the sales price charged to the purchaser and has not been absorbed by the retailer.

(b) Amounts ending in three cents ($0.03) and four cents ($0.04) are rounded Page 92 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO up to the nearest five ($0.05) cents;

CHAPTER 161 43 (c) Amounts ending in six cents ($0.06) and seven cents ($0.07) are rounded down to the nearest five ($0.05) cents;

Page 93 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) Amounts ending in three cents ($0.03) and four cents ($0.04) are rounded up to the nearest five ($0.05) cents;

Page 94 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (e) Excavation;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (g) Filling, grading, and the provision of drainage, storm water retention, utility installation, including but not limited to water, sewer, sewage treatment, gas, electricity, and communications;

Page 95 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (2) ](a) 1.

A taxing district created under this paragraph shall comply with KRS Page 96 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 65.182 to 65.190, including the petition requirements, but not the percentage of registered voter signature requirements under KRS 65.182(1)(a).[ 2.

CHAPTER 161 45 (c) The special ad valorem tax shall be:

The net profits of self-employed individuals, partnerships, professional Page 97 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO associations, or joint ventures resulting from businesses, trades, professions, occupations, or activities conducted in the district;

Any wage assessments Page 98 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO imposed within the district shall expire and no longer be imposed upon the earlier of:

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY 3.

Page 99 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO f.

Page 100 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (a) Represent a multicounty region;

CHAPTER 161 47 4.

(1) (a) Before the execution of an interlocal agreement to create a district, all local Page 101 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO governments with territory wholly or partially within the boundaries of the multicounty region shall be provided written notice of the intent to create the district by the governing body of the local governments seeking to create the district.

(d) Notwithstanding KRS 81A.534(1), a district created pursuant to Sections 27 to 30 of this Act that is wholly located within unincorporated territory of one Page 102 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (1) or more counties and meets the requirements of KRS 81A.534(2) shall qualify automatically as a county industrial district under the provisions of KRS 81A.532 to 81A.536 upon the enactment of a single, final ordinance designating the district as a county industrial district by the fiscal court of any county or counties in which the district is physically located.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (1) "Department" means the Department of Revenue;

however, "severing" or "severed" shall not include the removal of natural gas from underground storage facilities into Page 103 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO which the natural gas has been mechanically injected following its initial removal from the earth;

Page 104 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) In a transaction involving related parties, gross value shall not be less than the fair market value for natural resources of similar grade and quality;

and CHAPTER 161 49 (8) (a) "Transportation expense" means:

The expenses incurred by a taxpayer using the taxpayer's[his] own Page 105 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO facilities in transporting natural resources from the point of extraction to a processing plant, tipple, or loading dock.

The estate includes property over which Kentucky has jurisdiction for Page 106 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO purposes of the taxes imposed by this chapter;

If the taxes due are Page 107 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO not paid within eighteen (18) months, interest at the tax interest rate as defined in KRS 131.010[(6)] shall be paid from the expiration of the eighteen (18) months until payment is actually made to the department.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (b) For deaths on or after July 1, 2026, all taxes imposed by this chapter, unless otherwise provided in this chapter, shall be due at the death of the decedent and shall be payable to the Department of Revenue within twenty-four (24) months thereafter.

(b) For deaths on or after July 1, 2026, the portion of the tax deferred under Page 108 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO this section shall be charged with interest at the tax interest rate as defined in KRS 131.010 commencing twenty-four (24) months after the date of death.

(c) The notices included in this subsection shall be sent by certified mail with Page 109 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO proof of mailing and include the information required by subsection (3)(d) of this section.

CHAPTER 161 51 (b) Include a statement advising the taxpayer that substantial additional administrative costs and fees associated with collection in addition to the amount due on the certificate of delinquency may be imposed and that collection actions may include foreclosure;

Page 110 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO or b.

If, due to insufficient staffing, the property valuation administrator is unable to provide the requested information to the third-party purchaser within ten (10) days of submission, the property valuation administrator shall immediately notify the third-party purchaser, and the third-partythird- party purchaser may send the notices required by subsections (1) and (2) of this section to the address reflected in the public records of the property valuation administrator.

Any notices sent pursuant to information obtained under this paragraph that are returned as undeliverable shall be re-sent by certified mail with proof of mailing addressed to the "Occupant" at the address of the Page 111 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO property that is the subject of the certificate of delinquency.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY a.

and Page 112 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO b.

If updated information is provided, the notices shall be re-sent by certified mail with proof of mailing to the updated address of the Page 113 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO owner within ten (10) days of the receipt of the updated information from the department.

If the third-party purchaser is required to register with the department as Page 114 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO provided in KRS 134.128(3), for certificates of delinquency purchased after June 1, 2012, a statement informing the taxpayer that upon written request and the payment of a processing fee, the third-party purchaser will offer a payment plan;

and CHAPTER 161 53 6.

Page 115 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (5) (a) For certificates of delinquency purchased after June 1, 2012, at the written request of a delinquent taxpayer, a third-party purchaser required to register with the department as provided in KRS 134.128(3) shall provide a monthly installment payment plan to a taxpayer.

(g) A third-party purchaser who is not required to register with the department as Page 116 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO provided in KRS 134.128(3), or who holds certificates of delinquency purchased prior to June 1, 2012, may voluntarily offer installment payment plans to delinquent taxpayers in accordance with the provisions of this subsection.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (6) Any person to whom a third-party purchaser transfers or assigns a certificate of delinquency shall be considered a third-party purchaser under this chapter.

Page 117 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 1.

and Page 118 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) Containing one (1) individual container, pouch, or package;

CHAPTER 161 55 (9) "Nonresident wholesaler" means any person who purchases cigarettes directly from the manufacturer and maintains a permanent location outside this state where Kentucky cigarette tax evidence is attached or from where Kentucky cigarette tax is reported and paid;

of this paragraph.] (c)[(b)] ["Open vaping system"] Does not include any product regulated as a Page 119 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO drug or device by the United States Food and Drug Administration under Chapter V of the Food, Drug, and Cosmetic Act;

(15)[(14)] "Resident wholesaler" means any person who purchases at least seventy-five percent (75%) of all cigarettes purchased by the wholesaler directly from the manufacturer on which the cigarette tax is unpaid, and who maintains an established place of business in this state where the wholesaler attaches cigarette tax Page 120 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO evidence or receives untax-paid cigarettes;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (16)[(15)] "Retail distributor" means a retailer who has obtained a retail distributor's license under KRS 138.195;

A[No] person shall not make cigarettes available to retailers for resale unless the person certifies and establishes to the satisfaction of the department that firm arrangements have been made to regularly supply at least Page 121 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO five (5) retail locations with Kentucky tax-paid cigarettes for resale in the regular course of business;

and (32)[(31)] "Vending machine operator" means any person that[who] operates one (1) or more vending machines containing cigarettes, tobacco products, vapor products, Page 122 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO or a combination thereof[cigarette vending machines].

CHAPTER 161 57 (b) Effective July 1, 2018, a surtax shall be paid in addition to the tax levied in paragraph (a) of this subsection at a proportionate rate of one dollar and six cents ($1.06) on each twenty (20) cigarettes.

Upon snuff at the rate of nineteen cents ($0.19) per each one and one-one-half half (1-1/2) ounces or portion thereof by net weight sold;

If the container, pouch, or package on which the tax is levied contains more than sixteen (16) ounces by net weight, the rate that shall be applied to the unit shall equal the sum of sixty-five cents ($0.65) plus nineteen cents ($0.19) for each increment of four (4) ounces or portion Page 123 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO thereof exceeding sixteen (16) ounces sold;

5.[4.]Upon5.[4.] Upon closed vapor cartridges, one dollar and fifty cents ($1.50) per cartridge;

and 6.[5.]Upon6.[5.] Upon open vaping systems, fifteen percent (15%) of the actual price for which the distributor sells:

A retailer located in this state shall not purchase tobacco products for resale to consumers from any person within or outside this state unless that person is a distributor licensed under KRS 138.195(7)(a) or the retailer applies for and is granted a retail distributor's license under KRS Page 124 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 138.195(7)(b) for the privilege of purchasing untax-paid tobacco products and remitting the tax as provided in this paragraph.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY c.

e.[d.]One.[d.] On purchases of untax-paid closed vapor cartridges, at the same rate levied by paragraph (a)5.[4.] of this subsection;

A distributor licensed under KRS 138.195(7)(a) may sell tobacco products or vapor products to another distributor licensed under KRS Page 125 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 138.195(7)(a) without payment of the excise tax.

(4) A reference product shall carry a marking labeling the contents as a research Page 126 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO cigarette, research vapor product, or a research tobacco product to be used only for tobacco-health research and experimental purposes and shall not be offered for sale, sold, or distributed to consumers.

Taxing tobacco products according to relative risk is a rational tax policy and may well serve the public health goal of CHAPTER 161 59 reducing smoking-related mortality and morbidity and lowering health care costs associated with tobacco-relatedtobacco- related disease.

(8) Upon receipt of the information required by subsection (7)(b) of this section, the department shall reduce the tax imposed on the modified risk tobacco product as required by subsection (3)(b) of this section on the first day of the calendar month Page 127 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO following the expiration of forty-five (45) days following receipt of the information required by subsection (7)(b) of this section.

File a return with the department on or before April 10, 2009, showing Page 128 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the entire inventory of snuff possessed by them or in their control at 11:59 p.m.

If the retailer or subjobber[ sub-jobber] cannot determine the actual amount paid for each item of other tobacco product, the retailer or subjobber[ sub-jobber] may use as the Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY purchase price the amount per unit paid as reflected on the most recent invoice received prior to April 1, 2009,[ ] for the same category of other tobacco product.

To prevent double taxation, if the invoice used by the retailer or subjobber[ sub-jobber] to determine the purchase price of the other tobacco product does not separately state the tax paid by the wholesaler, the retailer or subjobber[ sub-jobber] may reduce the Page 129 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO amount paid per unit by seven and one-half percent (7.5%).

(c) The affixed stamp shall be prima facie evidence of payment of the cigarette Page 130 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO tax.

Page 131 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) The department shall have the power to withhold compensation as provided in paragraph (a) of this subsection from any licensed wholesaler for failure to abide by any provisions of KRS 138.130 to 138.205 or any administrative regulations promulgated thereunder.

CHAPTER 161 61 (5) (a) Payment for units of cigarette tax evidence shall be made at the time the units are sold, unless the licensed wholesaler:

Page 132 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) 1.

(b) Tax evidence shall[may] not be transferred or negotiated, and shall[may] not, Page 133 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO by any scheme or device, be given, bartered, sold, traded, or loaned to any other person.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (8) (a) In the event any retailer takes[receives into his] possession of cigarettes to which evidence of Kentucky tax payment is not properly affixed, the retailer shall, within twenty-four (24) hours, notify the department of the receipt.

(b) Any licensed wholesaler, licensed subjobber[sub-jobber], or licensed vending machine operator may hold cigarettes stamped with the tax evidence of Page 134 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO another state for any period of time, subsection (2) of this section notwithstanding.

Page 135 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) Each nonresident wholesaler shall secure a separate license for each place of business at which evidence of Kentucky cigarette tax is affixed or from where Kentucky cigarette tax is reported and paid.

CHAPTER 161 63 (b) Each license shall be secured on or before July 1 of each year.

Page 136 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) Each license shall be secured on or before July 1 of each year.

The Page 137 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO license shall be secured on or before July 1 of each year, and each licensee shall pay the sum of four hundred fifty dollars ($450) for each year, or portion thereof, for which the license is secured.

If the department grants the license, the licensee shall pay the sum of five hundred dollars ($500) for each year, or portion thereof, for which the license is secured, and the licensee shall be Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY subject to the excise tax in the same manner and subject to the same requirements as a distributor required to be licensed under this paragraph.

Comply with KRS 131.600 to 131.630, 138.130 to 138.205, 248.752, or Page 138 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 248.754 or any administrative regulations promulgated thereunder;

All books, records, invoices, and documents Page 139 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO required by this section shall be preserved in a form prescribed by the department for not less than four (4) years from the making of the records unless the department authorizes, in writing, the destruction of the records.

CHAPTER 161 65 (c) If the distributor or retail distributor timely reports and pays the tax due, the distributor or retail distributor may deduct an amount equal to one percent (1%) of the tax due.

(15) Any license issued by the department under this section shall not be construed to waive or condone any violation that occurred or may have occurred prior to the Page 140 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO issuance of the license and shall not prevent subsequent proceedings against the licensee.

Page 141 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) The qualified farming operation credit permitted by KRS 141.412;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (q) The energy efficiency credits permitted by KRS 141.436;

Page 142 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (y) The renewable chemical production credit permitted by KRS 141.4231;

(5) The following nonrefundable credits shall be applied against the sum of the tax Page 143 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) of this section, and the tax imposed by KRS 141.0401 in the following order:

CHAPTER 161 67 (g) The coal conversion credit permitted by KRS 141.041;

(r) The ENERGY STAR home or ENERGY STAR manufactured home credit Page 144 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO permitted by KRS 141.437;

(1) No present or former commissioner or employee of the department, present or former member of a county board of assessment appeals, present or former property valuation administrator or employee, present or former secretary or employee of the Page 145 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Finance and Administration Cabinet, former secretary or employee of the Revenue Cabinet, or any other person, shall intentionally and without authorization inspect or divulge any information acquired by him or her of the affairs of any person, or information regarding the tax schedules, returns, or reports required to be filed with the department or other proper officer, or any information produced Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY by a hearing or investigation, insofar as the information may have to do with the affairs of the person's business.

Page 146 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (f) Providing to a third-party purchaser pursuant to an order entered in a foreclosure action filed in a court of competent jurisdiction, factual information related to the owner or lessee of coal, oil, gas reserves, or any other mineral resources assessed under KRS 132.820.

KRS 154.26-095 for purposes of the Kentucky industrial revitalization Page 147 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO credit and the job assessment fees;

CHAPTER 161 69 11.

Section 56 of this Act for purposes of the High School Equivalency Page 148 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Diploma Incentives credit;

These electronic maps shall not be relied upon to determine actual Page 149 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO boundaries of mined-out parcel areas.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY 1.

and Page 150 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 9.

153(29) on January 1, 2001, to which access is provided on an unbundled basis in accordance with 47 U.S.C.

Page 151 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 251(c)(3);

9.[10.]9.[10.]Interstate Interstate telephone service, if the interstate charge is separately itemized for each call;

CHAPTER 161 71 (5) "Utility services" means the furnishing of communications services, electric power, water, and natural, artificial, and mixed gas;

Page 152 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (13) "Commercial mining of cryptocurrency" has the same meaning as in KRS 139.516;

Page 153 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) The information required to be reported under this section shall not be considered confidential taxpayer information and shall not be subject to KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes prohibiting disclosure or reporting of information.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (a) Provide the department with the address of a Kentucky location at which records of expenditures qualifying for the tax credit will be maintained, and with the name of the individual maintaining these records;

Page 154 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (6) The twelve (12) month period during which expenditures may qualify for the tax credit shall begin on the date of the earliest expenditure reported.

(11) Any tax credit or part thereof paid to a motion picture production company as a Page 155 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO result of error by the department shall be repaid by such company to the secretary.

CHAPTER 161 73 (3) Tangible personal property located in a foreign trade zone established pursuant to 19 U.S.C.

Page 156 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (5) [Property that is certified as a fluidized bed energy production facility as defined in KRS 211.390;

and (11)[(12)] (a) Any bridge built by an adjoining state, by the government of the United Page 157 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO States, or by any commission created by an Act of Congress, over a boundary line stream between this state and an adjoining state, which is:

(b) Cost of production shall be computed on the basis of a plant facility, which includes[shall include] all operations within the continuous, unbroken, integrated manufacturing or industrial processing process that ends with a Page 158 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO product packaged and ready for sale.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (c) A person who performs a manufacturing or industrial processing activity for a fee and does not take ownership of the tangible personal property that is incorporated into, or becomes the product of, the manufacturing or industrial processing activity is a toller.

Maintains accounting records that show the expenses it incurs to fulfill the binding contract that include but are not limited to energy or energy-energy-producing producing fuels, materials, labor, procurement, depreciation, maintenance, taxes, administration, and office expenses;

A business purpose is a purpose other than the reduction of sales tax Page 159 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO liability for the purchases of energy and energy-producing fuels;

Page 160 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (10) Machinery for new and expanded industry;

(b) Includes machinery, attachments, and replacements therefor, repair parts, and replacement parts which are used or manufactured for use on, or in the operation of farm machinery and which are necessary to CHAPTER 161 75 the operation of the machinery, and are customarily so used, including but not limited to combine header wagons, combine header trailers, or any other implements specifically designed and used to move or transport a combine head;

The exemption shall apply but not be limited to vent board equipment, waterer and feeding systems, brooding systems, ventilation systems, alarm systems, Page 161 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO and curtain systems.

Page 162 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (19) [Any property which has been certified as a fluidized bed energy production facility as defined in KRS 211.390;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (20)[(21)] Beginning on October 1, 1986, food or food products purchased for human consumption with food coupons issued by the United States Department of Agriculture pursuant to the Food Stamp Act of 1977, as amended, and required to be exempted by the Food Security Act of 1985 in order for the Commonwealth to continue participation in the federal food stamp program;

(22)[(23)] Ratite birds and eggs to be used in an agricultural pursuit for the breeding and production of ratite birds, feathers, hides, breeding stock, eggs, meat, and ratite by-by-products, products, and the following items used in this agricultural pursuit:

Page 163 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals;

In addition, the exemption shall apply whether or not the seller is under contract to deliver, assemble, and incorporate into real estate the equipment, machinery, Page 164 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO attachments, repair and replacement parts, and any materials incorporated into the construction, renovation, or repair of the facilities;

In addition, the exemption shall apply whether or not the seller is under contract to deliver, assemble, and incorporate CHAPTER 161 77 into real estate the equipment, machinery, attachments, repair and replacement parts, and any materials incorporated into the construction, renovation, or repair of the facilities;

(28)[(29)] Aquatic organisms sold directly to or raised by a person regularly engaged in Page 165 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the business of producing products of aquaculture, as defined in KRS 260.960, for sale, and the following items used in this pursuit:

In addition, the exemption shall apply whether or not the seller is under contract to deliver, assemble, and Page 166 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO incorporate into real estate the equipment, machinery, attachments, repair and replacement parts, and any materials incorporated into the construction, renovation, or repair of the facilities;

(32)[(33)] Drugs and over-the-counter drugs, as defined in KRS 139.472, that are purchased by a person regularly engaged in the business of farming and used in the treatment of cattle, sheep, goats, swine, poultry, ratite birds, llamas, alpacas, Page 167 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO buffaloes[buffalo], aquatic organisms, or cervids;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY c.

Page 168 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 2.

Page 169 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO i.

and CHAPTER 161 79 b.

Page 170 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (2) Notwithstanding KRS 49.220 and 139.770, on and after August 1, 2024, any person who paid sales tax under KRS 139.200 or use tax under KRS 139.310 on currency or bullion currency that is exempt from sales and use tax under KRS 139.480 (36)[(37)] may maintain an action for a refund of the tax paid, as an individual or by seeking certification as a class under Rule 23 of the Kentucky Rules of Civil Procedure, for a refund on behalf of the person and other persons similarly situated against the Commonwealth.

Page 171 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Section 50.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (c) Raising and feeding poultry;

Page 172 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) Persons that meet the requirements of subsection (2) of this section but have not yet received an agriculture exemption license number from the department prior to January 1, 2023, may issue a fully completed exemption certificate or a fully completed Streamlined Sales Tax Certificate of Exemption without the agriculture exemption license number prior to January 1, 2023.

When the person ceases to engage in the agriculture activity for which Page 173 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the agriculture exemption license number was granted;[,] whichever comes first.

CHAPTER 161 81 (d)[(c)] The person may apply for a renewal of the agriculture exemption license number prior to the expiration date if the person continues to meet the requirements of subsection (2) of this section and provides documentation required by subsection (4)(b)5.

Page 174 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) The seller or retailer shall be relieved of the liability for collecting and remitting the sales and use tax if the seller or retailer meets the requirements of KRS 139.260 and 139.270.

(a) "Kentucky gross receipts" means an amount equal to the computation of the numerator of the apportionment fraction under KRS 141.120, any administrative regulations related to the computation of the sales factor, and KRS 141.121 and includes the proportionate share of Kentucky gross receipts of all wholly or partially owned limited liability pass-through entities, including all layers of a multi-layeredmulti- layered pass-through structure;

For manufacturing, producing, reselling, retailing, or wholesaling Page 175 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO activities, cost of goods sold shall only include costs directly incurred in acquiring or producing the tangible product.

Costs allowable under Section 263A of the Internal Revenue Code may be included only to the extent the costs are incurred in acquiring or producing the tangible product Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY generating the Kentucky gross receipts.

"Gross profits from all sources" means gross receipts from all sources reduced by returns and allowances attributable to gross receipts from all Page 176 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO sources, less the cost of goods sold attributable to gross receipts from all sources.

(2) (a) For taxable years beginning on or after January 1, 2007, an annual limited liability entity tax shall be paid by every corporation and every limited liability pass-through entity doing business in Kentucky on all Kentucky gross Page 177 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO receipts or Kentucky gross profits except as provided in this subsection.

If the corporation's or limited liability pass-through entity's gross receipts from all sources are three million dollars ($3,000,000) or less, the limited liability entity tax shall be one hundred seventy-seventy-five five dollars ($175);

If the corporation's or limited liability pass-through entity's gross receipts from all sources are greater than three million dollars ($3,000,000) but less than six million dollars ($6,000,000), the limited liability entity tax shall be nine and one-half cents ($0.095) per CHAPTER 161 83 one hundred dollars ($100) of the corporation's or limited liability pass-through entity's Kentucky gross receipts reduced by an amount equal to two thousand eight hundred fifty dollars ($2,850) multiplied by a fraction, the numerator of which is six million dollars ($6,000,000) less the amount of the corporation's or limited liability pass-through entity's Kentucky gross receipts for the taxable year, and the denominator of which is three million dollars ($3,000,000), but in no case shall the result be less than one hundred seventy-five dollars ($175);

If the corporation's or limited liability pass-through entity's gross Page 178 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO receipts from all sources are equal to or greater than six million dollars ($6,000,000), the limited liability entity tax shall be nine and one-half cents ($0.095) per one hundred dollars ($100) of the corporation's or limited liability pass-through entity's Kentucky gross receipts.

If the corporation's or limited liability pass-through entity's gross profits from all sources are three million dollars ($3,000,000) or less, the limited liability entity tax shall be one hundred seventy-seventy-five five dollars ($175);

If the corporation's or limited liability pass-through entity's gross profits from all sources are equal to or greater than six million dollars ($6,000,000), the limited liability entity tax shall be seventy-five cents ($0.75) per one hundred dollars ($100) of all of the corporation's or limited liability pass-through entity's Kentucky Page 179 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO gross profits.

(c) A credit shall be allowed against the tax imposed under paragraph (a) of this subsection for the current year to a corporation or limited liability pass-pass-through through entity that owns an interest in a limited liability pass-through entity.

The credit shall be the proportionate share of tax calculated under this subsection by the lower-level pass-through entity, as determined after the amount of tax calculated by the pass-throughpass- through entity has been reduced by the minimum tax of one hundred seventy-five dollars ($175).

The Page 180 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO amount of credit allowed to a corporation based on the amount of tax paid under subsection (2) of this section for the current year shall be applied to the income tax due from the corporation's activities in this state.

(b) The credit allowed members, shareholders, or partners of a limited liability pass-through entity shall be the members', shareholders', or partners' proportionate share of the tax calculated under subsection (2) Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY of this section for the current year after subtraction of any credits identified in KRS 141.0205, as determined after the amount of tax paid has been reduced by the minimum tax of one hundred seventy-fiveseventy- five dollars ($175).

The credit allowed to members, shareholders, or partners of a limited liability pass-throughpass- through entity shall be applied to income tax assessed on income from the limited liability pass-through entity.

Any remaining credit from the limited liability pass-pass-through through entity shall be disallowed.

Page 181 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 3.

Real estate mortgage investment conduits as defined in Section 860D of Page 182 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the Internal Revenue Code;

or CHAPTER 161 85 18.

Corporations whose only owned or leased property located in this state Page 183 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO is located at the premises of a printer with which it has contracted for printing, provided that:

8.[9.]Real8.[9.] Real estate investment trusts as defined in Section 856 of the Internal Revenue Code;

9.[10.]9.[10.]Regulated Regulated investment companies as defined in Section 851 of the Internal Revenue Code;

or Page 184 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 13.[14.] Publicly traded partnerships as defined by Section 7704(b) of the Internal Revenue Code that are treated as partnerships for federal tax purposes under Section 7704(c) of the Internal Revenue Code, or their publicly traded partnership affiliates.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (c) Any limited liability pass-through entity that reduces Kentucky gross receipts or Kentucky gross profits in accordance with paragraph (b) of this subsection shall disregard the ownership interest of the qualified exempt organization in determining the amount of credit available under subsection (3) of this section.

(d) The Department of Revenue may promulgate an administrative regulation to further define "qualified exempt organization" to include an entity for which exemption is constitutionally or legally required, or to exclude any entity created primarily for tax avoidance purposes with no legitimate business Page 185 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO purpose.

(4) (a) Every pass-through entity required to file a return under subsection (1) of this section, except publicly traded partnerships as described in KRS Page 186 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 141.0401(6)(a)18.

PageCHAPTER 187161 of87 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 4.

If the pass-through entity is doing business only in this state, the partner's, member's, or shareholder's total distributive share of the pass-pass-through through entity's items of income, loss, and deduction;

For taxable years beginning on or after January 1, 2007, but prior to January 1, 2018, shall include the proportionate share of the sales, property, and payroll of the limited liability pass-throughpass- through entity or general partnership in computing its own apportionment factor;

and Page 188 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 2.

(d) The attribution to the pass-through entity of the pro rata share of property, payroll and sales from its role as a partner or member in another pass-through entity will also apply when determining the pass-throughpass- through entity's ultimate apportionment factor for property, payroll and sales as required under subsection (11) of this section.

(11) (a) For taxable years beginning prior to January 1, 2018, a pass-through entity doing business within and without the state shall compute an apportionment Page 189 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO fraction, the numerator of which is the property factor, representing twenty-twenty-five five percent (25%) of the fraction, plus the payroll factor, representing twenty-five percent (25%) of the fraction, plus the sales factor, representing fifty percent (50%) of the fraction, with each factor determined in the same manner as provided in KRS 141.901, and the denominator of which is four (4), reduced by the number of factors, if any, having no denominator, provided that if the sales factor has no denominator, then the denominator shall be reduced by two (2).

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (b) For taxable years beginning on or after January 1, 2018, a pass-through entity doing business within and without the state shall compute an apportionment fraction as provided in KRS 141.120.

(b) A qualified investment partnership shall be subject to all other provisions relating to a pass-through entity under this section and shall not be subject to Page 190 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the tax imposed under KRS 141.040 or 141.0401.

(a) A person for whom the taxpayer receives federally funded payments for on-on-the-job Page 191 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the-job training;

CHAPTER 161 89 (5) For purposes of this section, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer, and in no instance shall the credit, if any, allowable by subsection Page 192 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (2) of this section for any employee qualified thereunder be claimed more than once for any taxable year.

Page 193 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 4.

(1) For taxable years beginning before January 1, 2028, a qualified farming operation shall be entitled to a nonrefundable credit against the Kentucky income tax liability established pursuant to the provisions of this chapter on any income of the qualified Page 194 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO farming operation generated by or arising out of the qualified farming operation's participation in a networking project, and against the limited liability entity tax imposed by KRS 141.0401 on any Kentucky gross profits or Kentucky gross receipts of the qualified farming operation Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY generated by or arising out of the qualified farming operation's participation in a networking project.

Page 195 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO b.

Page 196 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) The provisions of subsection (16) of this section apply to property placed in service after September 10, 2001.

CHAPTER 161 91 (3) Effective August 1, 1985, "reasonable allowance" as used in subsection (2) of this section shall mean depreciation computed in accordance with Section 167 of the Internal Revenue Code and related regulations in effect on December 31, 1980, for all property placed in service on or after January 1, 1981, except as provided in subsections (6) to (8) of this section.

(a) Dividing the total of the deductions allowed under Internal Revenue Code Page 197 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Section 168 by one and four tenths (1.4);

Corporations will not be permitted to adjust the basis by the ACRS depreciation not allowed for Kentucky income tax purposes in tax years Page 198 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO beginning on or before June 30, 1984.

(a) Compute the Kentucky unadjusted basis which is the cost of the asset reduced by any basis adjustment made by the taxpayer under Section 48(q)(1) of the Internal Revenue Code and any expense allowed and utilized under Section 179 of the Internal Revenue Code (First Year Expense) in determining Kentucky net income in prior years, and Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (b) Compute the adjusted basis by subtracting the depreciation allowed or allowable for Kentucky income tax purposes from the unadjusted basis, except corporations will not be permitted to adjust the basis of assets by the ACRS depreciation not allowed for Kentucky income tax purposes in the tax years beginning on or before June 30, 1984, and (c) Compute the gain or loss by subtracting the adjusted basis from the value received from the disposition of the depreciable property, and Page 199 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (d) Compute the recapture of depreciation required under Sections 1245 through 1256 of the Internal Revenue Code and related regulations, and (e) Unless otherwise provided in this subsection the provisions of the Internal Revenue Code and related regulations governing the determination of capital gains or losses shall apply for Kentucky income tax purposes.

(11) Unless otherwise provided by this chapter, the basis of property placed in service prior to January 1, 1990, for purposes of Kentucky income tax shall be the basis, adjusted or unadjusted, required to be used under Section 167 of the Internal Revenue Code in effect on December 31, 1980.

(e) "Transition amount" means the net difference between the adjusted Kentucky Page 200 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO basis and the adjusted federal basis of all transition property determined as of the first day of the first taxable year beginning after December 31, 1993.

(13) For taxable years beginning after December 31, 1993, the amounts of depreciation and election to expense deductions, allowed or allowable, the basis of assets, adjusted or unadjusted, and the gain or loss from the sale or other disposition of assets shall be the same for Kentucky income tax purposes as determined under Chapter 1 of the Internal Revenue Code.

(a) In the first taxable year beginning after December 31, 1993, and the eleven (11) succeeding taxable years, the taxpayer shall include in gross income one-one-twelfth twelfth (1/12) of the transition amount if:

(b) In the first taxable year beginning after December 31, 1993 and the three (3) succeeding taxable years, if the transition amount exceeds one hundred thousand dollars ($100,000), or if the transition amount does not exceed one hundred thousand dollars ($100,000) and the taxpayer elects the provision of this CHAPTER 161 93 paragraph with the filing of the income tax return for the first taxable year beginning after December 31, 1993, the taxpayer shall:

Page 201 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 1.

(16) (a) For property placed in service after September 10, 2001, only the depreciation deduction allowed under Section 168 of the Internal Revenue Code in effect on December 31, 2001, exclusive of any amendments made subsequent to that Page 202 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO date, shall be allowed.

and (c) Final reports that qualify the student for the tuition discounts under subsection Page 203 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (3)(a) of this section and that qualify the employer for tax credits under subsection (4) of the section.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (b) The program shall work with the postsecondary institutions to establish notification procedures for students who qualify for the tuition discount.

Page 204 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 2.

Page 205 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) The information required to be reported under this subsection shall not be considered confidential taxpayer information and shall not be subject to KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes prohibiting disclosure or reporting of information.

CHAPTER 161 95 (3)[(2)] "Certified rehabilitation" means a completed substantial rehabilitation of a certified historic structure that the council certifies meets the United States Secretary of the Interior's Standards for Rehabilitation;

Seventy-five percent (75%) of the credit cap awarded to property other Page 206 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO than owner-occupied residential property, which includes the major certified rehabilitation allowed under KRS 171.3963;

(7)[(5)] "Disqualifying work" means work that is performed within three (3) years of the completion of the certified rehabilitation that, if performed as part of the rehabilitation certified under KRS 171.397 and Section 59 of this Act, would have made the rehabilitation ineligible for certification;

Page 207 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (9)[(7)] "Local government" means a city, county, urban-county, charter county, or consolidated local government;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (a) Twenty thousand dollars ($20,000) for an owner-occupied residential property;

(14)[(11)] "Taxpayer" means any individual, corporation, limited liability company, business development corporation, partnership, limited partnership, sole Page 208 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO proprietorship, association, joint stock company, receivership, trust, professional service organization, or other legal entity through which business is conducted that:

Page 209 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) For applications for preliminary approval received on or after April 30, 2010, the credit shall be refundable if the taxpayer makes an election under subsection (2)(b) of this section.

CHAPTER 161 97 3.

The council shall notify the taxpayer and Department of Revenue of the Page 210 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO final approved credit amount within sixty (60) days of the receipt of a completed application from the taxpayer.

Page 211 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (5) The credit amount approved for a calendar year for all taxpayers under subsection (2)(a) of this section shall be limited to the certified rehabilitation credit cap.

For applications received prior to April 30, 2010, if the taxpayer is a pass-through entity not subject to the tax imposed by KRS 141.040, the Page 212 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO taxpayer shall apply the credit at the entity level against the limited liability tax entity imposed by KRS 141.0401, and shall also pass the credit through in the same proportion as the distributive share of income or loss is passed through.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (8) Credits received under this section may be transferred or assigned if an election is made under subsection (2)(b) of this section, for some or no consideration, along with any related benefits, rights, responsibilities, and liabilities to a financial institution as defined in KRS 141.010 subject to the taxes imposed by KRS 136.505, 141.040, or 141.0401.

(10) The taxes imposed in KRS 141.020, 141.040, and 141.0401 shall not apply to any consideration received for the transfer, sale, assignment, or use of a tax credit Page 213 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO approved under this section.

Page 214 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) The amount of the credit shall be equal to:

CHAPTER 161 99 (d) An insurance company claiming a tax credit against the insurance premiums tax is not required to pay additional retaliatory tax levied pursuant to KRS 304.3-270.

of this Page 215 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO paragraph, except that the amount shall not exceed one hundred million dollars ($100,000,000), including any amounts added under paragraph (c) of this subsection from a prior allocation period;

and Page 216 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO b.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY 2.

Transfer the credit in accordance with subsection (8) of this Page 217 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO section, in which case the credit shall be nonrefundable.

If the entire credit cap allocated for applications in paragraph (b) of this subsection is not entirely utilized for preliminary applications received under paragraph (a) of this subsection, the remaining portion Page 218 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO shall be made available for all other properties having submitted preliminary applications within the same application round regardless of property type.

(b) The maximum credit which may be claimed with regard to all other property that is not owner-occupiedowner- occupied residential shall be ten million dollars ($10,000,000) subject to subsection (6) of this section.

KRS 136.320, 136.330, 136.40, 136.350, 136.360, 136.370, 136.390, or Page 219 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 304.3-270.

CHAPTER 161 101 1.

(9) For purposes of this section, a lessee of a certified historic structure shall be Page 220 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO treated as the owner of the structure if the remaining term of the lease is not less than the minimum period promulgated by administrative regulation by the council.

Page 221 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Section 60.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (a) The certified historic structure is located within the jurisdiction of a consolidated local government or urban-county government;

Equal the percentage of qualified rehabilitation expenses as provided in Page 222 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO KRS 171.397(1)(a) and Section 59 of this Act;

(4) The total approved credit shall be available over a four (4) year period and the maximum credit which may be claimed in a taxable year shall not exceed twenty-twenty-five five percent (25%) of the total approved credit.

(3) The corporation, in conjunction with the Kentucky Heritage Council and the Page 223 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Department of Revenue, may promulgate administrative regulations in accordance with KRS Chapter 13A to establish policies and procedures to ensure compliance with this section.

(a) 300 prisoners or more...............................................................................$6,000more.......................................................................................................$6,000 CHAPTER 161 103 (b) 200 to 299 prisoners..................................................................................$4,000prisoners..........................................................................................................$4,000 (c) 100 to 199 prisoners..................................................................................$2,000prisoners..........................................................................................................$2,000 (d) 99 or fewer prisoners.................................................................................$1,000prisoners....................... (5) For purposes of calculating the amount to be transferred to the jail canteen account, the average daily number of inmates shall be equal to the average daily inmate population of the jail in the immediately preceding fiscal year.

(6).................................................................................$1,000 Notwithstanding(5) KRSFor 67.0802(6)(a),purposes compensationof resultingcalculating from the disposalamount ofto Pagebe 224transferred ofto 386the HB075790.100jail -canteen 90account, -the XXXXaverage 4/14/2026daily 4:30number PMof Vetoedinmates in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO real or personal property that was purchased from a canteen account shall be returnedequal to the canteenaverage accountdaily frominmate whichpopulation of the realjail orin personalthe propertyimmediately waspreceding originallyfiscal purchased.year.

(6) Notwithstanding KRS 67.0802(6)(a), compensation resulting from the disposal of real or personal property that was purchased from a canteen account shall be returned to the canteen account from which the real or personal property was originally purchased.

Page 225 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) Make a complete audit and verification of all moneys handled for the account of the state government by local officials charged with the collection of fees or other money for or on behalf of the state, when an audit is demanded in writing by the Legislative Research Commission, the secretary of the Finance and Administration Cabinet, or the Governor, and may make an audit when it is not so demanded;

Page 226 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (g) Make special audits and investigations when required by the Governor;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (h) Investigate the means of accounting for, controlling, and insuring the safe custody of all property of the state, and verify the existence and condition of such property charged to, or held in the custody of any state agency;

(5) The Auditor may receive appropriations from the general fund for audits of the statewide systems of personnel and payroll, cash and investments, revenue Page 227 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO collection, and the state accounting system.

Page 228 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b)[(2)] In addition to payments for attendance at board meetings all board members may also be paid one hundred dollars ($100) for each day spent in the preparation of recommended orders, the review of transcripts or other matters related to appeals before the board.

CHAPTER 161 105 (2) Each agency of the executive branch of state government with employees covered by this chapter shall be annually assessed for the amount required for the operation of the Personnel Board.

The rate shall be an amount for each one thousand (1,000) gallons of water use Page 229 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO and shall be effective for at least one (1) year.

If determined necessary by the office, a second assessment may be Page 230 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO assessed in the same manner as the annual assessment in subparagraph 2.

Subsequent annual assessments shall be paid on or before March 31 of the year following the assessment period.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (3) As part of the assessment process, the office shall establish and maintain the Kentucky Access fund.

Page 231 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (d) [All premium taxes collected under KRS Chapter 136 from any insurer, and any retaliatory taxes collected under KRS 304.3-270 from any insurer, for accident and health premiums that are in excess of the amount of the premium taxes and retaliatory taxes collected for the calendar year 1997;

of this section, moneys received and available from the Kentucky Health Care Improvement Fund after the office determines available funding for Kentucky Access for the current calendar year pursuant to subsection (6) of this section, shall be used Page 232 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO to reimburse GAP participating insurers for any actual guaranteed acceptance program losses.

CHAPTER 161 107 (8) Insurers paying an assessment may include in any health insurance rate filing the amount of these assessments as provided for in Subtitle 17A of this chapter.

Page 233 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (9) Insurers shall pay any assessment amounts authorized in KRS 304.17B-001 to 304.17B-031 within thirty (30) days of receiving notice from the office of the assessment amount.

Page 234 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (a) The Office of State Budget Director, headed by the state budget director.

Page 235 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) Governor's Office for Policy Research, headed by the state budget director.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (d) Governor's Office for Economic Analysis, headed by the state budget director.

(c) The Department of Revenue shall provide assistance and furnish data that Page 236 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO is not restricted by KRS 131.190.

Any contract of sale of a commodity for future delivery, or any Page 237 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO option on such a contract, executed on or subject to the rules of a designated contract market;

CHAPTER 161 109 a.

(g) "Speculative position" means a financial commitment made by a consumer Page 238 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO in a prediction market;

Page 239 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO SECTION 72.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (4) Notwithstanding any provision of this chapter or KRS 275.150, 362.1-306(3) or predecessor law, or 362.2-404(3)362.2- 404(3) to the contrary, the managers of a limited liability company, the partners of a limited liability partnership, and the general partners of a limited liability limited partnership or any other person holding any equivalent office of a limited liability company, limited liability partnership, or limited liability limited partnership subject to Section 9 or 71 of this Act shall be personally and individually liable, both jointly and severally, for the fantasy sports service provider or prediction market operator taxes.

The personal and individual liability shall apply to every manager of a limited liability Page 240 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO company, partner of a limited liability partnership, or general partner of a limited liability limited partnership at the time the tax becomes or became due.

When a tax rate is levied by a[ district board of education or other] Page 241 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO taxing district that is primarily located in a county with a population of three hundred thousand (300,000) or more inhabitants[containing an urban-county government or a consolidated local government], the portion of a tax rate levied by an ordinance, order, resolution, or motion of a [district board of education or other ]taxing district subject to recall as provided for in KRS 68.245, 132.023, 132.027, and 160.470, shall go into effect fifty (50) days after its passage if a petition is not filed to challenge the levy.

For petition committees filing petitions in response to a tax rate levied by a[ district board of education or other] taxing district that is primarily located in a county with a population of three hundred thousand (300,000) or more inhabitants[containing an urban-county government Pageor 242a ofCHAPTER 386161 HB075790.100111 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO or a consolidated local government], whether or not the petition committee is willing to incur all of the expenses associated with electronic petition signatures.

Each sheet of the petition may contain the names of voters from more Page 243 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO than one (1) voting precinct;

Page 244 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO ii.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY c.

(g) If the county clerk finds the petition to be sufficient, the clerk shall certify to the petition committee and the taxing district[local governmental entity or district board of education] within the thirty (30) day period provided for in paragraph (f) of this subsection that the petition is properly presented and in compliance with the provisions of this section, and that the ordinance, order, Page 245 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO resolution, or motion levying the tax will be placed before the voters for approval.

The action by the local governmental entity or local[district] board of education to cancel an election shall be valid only if taken within fifteen (15) days following the date the clerk finds the petition to Page 246 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO be sufficient.

If a majority of the votes CHAPTER 161 113 cast upon the question favor its passage, the ordinance, order, resolution, or motion shall become effective.

(d) If the ordinance, order, resolution, or motion fails to pass pursuant to an election held under paragraph (a) of this subsection, the property tax rate Page 247 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO which will produce four percent (4%) more revenues from real property, exclusive of revenue from new property[ as defined in KRS 132.010], than the amount of revenue produced by the compensating tax rate[ defined in KRS 132.010], shall be levied without further approval by the local governmental entity or local[district] board of education.

(1) (a) Notwithstanding any statutory provisions to the contrary, a local[no district] board of education shall not levy a general tax rate which will produce more revenue, exclusive of revenue from net assessment growth as defined in KRS 132.010, than would be produced by application of the general tax rate that Page 248 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO could have been levied in the preceding year to the preceding year's assessment, except as provided in subsections (10)[(9)] and (11)[(10)] of this section and KRS 157.440.

and (c) The general tax rate which will produce, respectively, no more revenue from real property, exclusive of revenue from new property, than four percent (4%) over the amount of revenue produced by the compensating tax rate defined in Page 249 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO KRS 132.010, and the amount of revenue expected to be produced.

The failure of Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY the local[district] board of education to furnish the rates within the time prescribed shall not invalidate any levy made thereafter.

A clear explanation if the proposed tax rate is expected to produce more or less revenue generated for the school district than received Page 250 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO from the general tax rate in the preceding year and the general areas to which any increase in revenue will be allocated;

Page 251 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (b) The local[district] board of education shall include the following information in the publication required in subsection (7) of this section and advertisement of[advertise] the hearing[ by causing the following to be published at least twice for two (2) consecutive weeks, in the newspaper of largest circulation in the county, a display type advertisement of not less than twelve (12) column inches]:

2.[4.]The2.[4.] The revenue expected from new property and personal property;[ 5.

The general areas to which revenue in excess of the revenue produced in the preceding year is to be allocated;] 3.[6.]ACHAPTER 161 115 3.[6.] A time and place for the public hearing which shall be held not less than seven (7) days nor more than ten (10) days after the day that the second advertisement is published;

and 4.[7.]The4.[7.] The purpose of the hearing[;

The local[district] board of Page 252 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO education may set reasonable time limits for testimony.

The name, address, and telephone number of the county clerk of the Page 253 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO county or urban-county in which the school district is located, with a notation to the effect that that official can provide the necessary information about the petition required to initiate recall of the tax rate.

(1) (a) Notwithstanding any statutory provisions to the contrary, effective for school years beginning after July 1, 1990, the board of education of each school district may levy an equivalent tax rate as defined in subsection (10)[(9)](a) of KRS 160.470 which will produce up to fifteen percent (15%) of those PageLegislative 254Research ofCommission 386PDF HB075790.100Version -ACTS 90OF -THE XXXXGENERAL 4/14/2026ASSEMBLY 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO revenues guaranteed by the program to support education excellence in Kentucky.

(c) The board of education of each school district may contribute the levy equivalent tax rate of five cents ($0.05) and equalization funds for energy conservation measures under guaranteed energy savings contracts pursuant to Page 255 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO KRS 45A.345, 45A.352, and 45A.353.

(2) (a) A district may exceed the maximum provided by subsection (1) of KRS 160.470 provided that, upon request of the board of education of the school district, the county board of elections shall submit to the qualified voters of the district, in the manner of submitting and voting as prescribed in paragraph (b) of this subsection, the question whether a rate which would produce Page 256 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO revenues in excess of the maximum provided by subsection (1) of KRS 160.470 shall be levied.

CHAPTER 161 117 (3) For the 1966 tax year and for all subsequent years for levies which were approved prior to December 8, 1965, no local[district] board of education shall levy a tax at a rate under the provisions of this section which exceeds the compensating tax rate as defined in KRS 132.010, except as provided in subsection (4) of this section and except that a rate which has been approved by the voters under this section but which was not levied by the local[district] board of education in 1965 may be levied after it has been reduced to the compensating tax rate as defined in KRS 132.010, and except that in any school district where the rate levied in 1965 was less than the maximum rate which had been approved by the voters, the compensating tax rate shall be computed and may be levied as though the maximum approved rate had been levied in 1965 and the amount of revenue which Page 257 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO would have been produced from such maximum levy had been derived therefrom.

(b) For assessment years beginning on or after January 1, 2029, in the event that a general tax rate applicable to real property levied by a local board of education will produce a percentage increase in revenue from personal property less than the percentage increase in revenue from real property, the local board of education may levy a general tax rate applicable to personal property which will produce the same percentage increase in revenue from personal property as the percentage increase in revenue from Page 258 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO real property;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (1) (a) The license fees imposed under KRS 160.482 to 160.488 on businesses, Page 259 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO trades, occupations, and professions shall be at a single, uniform percentage rate not to exceed one-half of one percent (0.5%) of:

and 2.[(b)]2.[(b)]The The net profits of all businesses, trades, occupations, and professions, for activities conducted in the county.

If only a portion of an entity's business is providing multichannel video programming services or communications services, including products or services that are related to and provided in Page 260 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO support of the multichannel video programming services or communications services, this exclusion applies only to that portion of the business that provides multichannel video programming services or communications services, including products or services that are related to and provided in support of the multichannel video programming services or communications services.

Page 261 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Section 79.

CHAPTER 161 119 (2) If one (1) or more boards of education of school districts within the county which contain at least ninety percent (90%) of county's inhabitants, in the same calendar year certify to the fiscal court requests for a license fee at an identical percentage rate, not to exceed one-half of one percent (0.5%), then the fiscal court shall impose such license fees at the requested rate.

and (b) The rate of a school tax imposed under KRS 160.482 to 160.488 and 160.605 shall never increase[In any calendar year in which one (1) or more boards of education of school districts containing at least ninety percent (90%) of the county's inhabitants make a certification pursuant to subsection Page 262 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (2) for a rate which is at a higher percentage than any currently imposed, the fiscal court shall impose the license fee at the higher rate and any rate imposed pursuant to subsections (1), (2), or (3) shall be rescinded upon the date the new rate takes effect].

After the levying in each district so agreeing of a tax under the terms of such agreement, the receipts from said tax shall be held in a common fund and disbursed therefrom to each district on the basis of average daily attendance, as Page 263 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO set forth in KRS 160.644.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY 1.

At the time of the filing of the affidavit, notify the petition committee that the clerk will publish a notice identifying the tax levy being challenged and providing the names and addresses of the petition committee in a newspaper of general circulation within the county, if such publication exists, if the petition committee remits an amount equal Page 264 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO to the cost of publishing the notice determined in accordance with the provisions of KRS 424.160 at the time of the filing of the affidavit.

(d) Upon the filing of the petition with the county clerk, the order or resolution shall be suspended from going into effect for that district until after the election provided for in subsection (2) of this section is held, or until the petition is finally determined to be insufficient and no further action may be Page 265 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO taken pursuant to paragraph (h) of this subsection.

(2) If the petition is sufficient, the county clerk shall, at the option of the local[district] Page 266 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO board of education, either submit the question to the voters of the school district at the next regular election or submit the question to the voters of the school district at a called common school election, which is to be held not less than thirty-five (35) days nor more than forty-five (45) days from the date the signatures on the petition are validated by the county clerk.

The question shall be so framed CHAPTER 161 121 that the voter may by his vote answer, "for" or "against." If a majority of the votes cast in a district or combined taxing district upon the question oppose its passage, the order or resolution shall not go into effect in that district or combined taxing district.

No local[school district] board of education shall levy any of the school taxes authorized by KRS 160.593 to 160.597, 160.601 to 160.617[160.633], and 160.635 to 160.648, except the levy required by KRS 160.614(3) and (6), until after compliance with the Page 267 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO following:

[(1) "Requesting school districts" shall mean those school districts for which the Department of Revenue is requested to act as tax collector under the authority of Page 268 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO KRS 160.627(2).

Subsequent requesting school districts shall pay their pro rata share, or ten percent (10%), whichever is less, of the unpaid balance of the initial "start-up costs" until the Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY department has fully recovered the costs.

The expenses, which shall be deducted by the Department of Revenue from payments to school districts made under the provisions of KRS 160.627(2), shall be allocated by the department to school districts on a basis proportionate to the number of returns processed by the Department of Revenue for each district compared to Page 269 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the total processed by the Department of Revenue for all districts.

(g) The department shall not be required to collect taxes authorized in KRS 160.621 of an individual when the department is not pursuing collection of Page 270 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO that individual's state income taxes.

In the event that more than one (1) local board of education within the county is participating in one (1) of these tax levies, the funds Page 271 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO collected shall be distributed in proportion to the tax rate levied and the number of pupils in average daily attendance in the participating districts as shown by the final certification by the chief state school officer for the previous school year pursuant to the provisions of KRS 157.310 to 157.440.

CHAPTER 161 123 Section 90.

The tax rate levied by the district under this provision shall not Page 272 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO be equalized by state funding, except as provided in paragraph (b) of this subsection.

Page 273 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 2.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY a.

100-526, Part A of Title XXIX of 104 Stat.

Any local school district that imposes both the levy authorized by Page 274 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO paragraph (a) of this subsection and the additional levy authorized by subparagraph 1.

(b) It is the intent of the General Assembly that for levies described in this subsection that are imposed on or after April 27, 2016, equalization funds, if Page 275 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO provided by the General Assembly, shall terminate upon the earlier of June 30, 2038, or the date the bonds for the local school district supported by this equalization funding are retired.

(4) (a) Notwithstanding any other provision of this section, any local school district receiving equalization funding prior to April 27, 2016, related to an equivalent rate levy described in subsection (1), (2), (3), or (5) of this section shall continue to receive the equalization funding related to the applicable equivalent rate levy, subject to subsection (6) of this section, the limitations established by subsections (1), (2), (3), and (5) of this section,[ and subject to] the fiscal condition of the Commonwealth, and the provision of funding by Page 276 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the General Assembly, until amended by subsequent action of the General Assembly.

A CHAPTER 161 125 local school district described in this paragraph shall not be eligible to receive equalization for any additional equivalent rate levies made by it on or after April 27, 2016.

Levied an additional five cents ($0.05) equivalent tax rate prior to April 27, 2016, for debt service, new construction, and major renovation beyond the five cents ($0.05) equivalent tax rate required by KRS Page 277 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 157.440(1)(b), except as provided in paragraph (b) of this subsection;

(b) For equivalent tax rates levied under this section on or after January 1, Page 278 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 2026, equalized funds shall not be authorized under this section or provided by the state.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (1) Each executive agency lobbyist, employer, and real party in interest shall file with the commission within ten (10) days following the engagement of an executive agency lobbyist, an initial registration statement showing all of the following:

(d) The name of the executive agency or agencies to which the engagement Page 279 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO relates;

(4) If an executive agency lobbyist is engaged by more than one (1) employer, the executive agency lobbyist shall file a separate initial and updated registration statement for each engagement and list compensation paid to, or received by each executive agency lobbyist, employer, and real party in interest as part of the Page 280 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO engagement.

If the commission determines the CHAPTER 161 127 registration statement does not contain all of the required information or that an executive agency lobbyist, employer, or real party in interest has failed to file a registration statement, the Page 281 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO commission shall send written notification of the deficiency by certified mail to the person who filed the registration statement or to the person who failed to file the registration statement regarding the failure.

Page 282 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (1) Beginning January 1, 2027, an electric vehicle power dealer shall not operate an electric vehicle charging station without first obtaining a retail electric vehicle charging license from the department.

The inspection shall include determinations of compliance with the standards in the current edition of the National Institute of Standards and Technology's Page 283 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Handbook 44 or other applicable standards relating to:

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (c) Output voltages from electric vehicle charging port connectors;

117-58, shall not be subject to the licensure or inspection requirements of this section or administrative regulations promulgated under this section until five (5) years have elapsed from the initial date of operation of the electric vehicle charging station and the long-long-term term stewardship requirement under 23 C.F.R.

(4) (a) "Weights and measures" means all weights and measures of every kind, Page 284 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO instruments and devices for weighing and measuring, and any appliances and accessories associated with any of the instruments and devices.

(9) "Commodity in package form" means a commodity put up or packaged in any manner in advance of sale in units suitable for either wholesale or retail sale, Page 285 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO exclusive of any auxiliary shipping container enclosing packages that individually conform to the requirements of KRS 363.510 to 363.850.

CHAPTER 161 129 (11) "Nonconsumer package" or "package of nonconsumer commodity" means any commodity in package form other than a consumer package, and particularly a package designed solely for industrial or institutional use or for wholesale distribution only;

(c) "Cord," when used in connection with wood intended for fuel purposes, means the amount of wood that is contained in a space of one hundred twenty-twenty-eight eight (128) cubic feet when the wood is ranked and well stowed;[ and] (13) "Weight," as used in connection with any commodity, means net weight.

(15) "Electric vehicle charging port" means the system at an electric vehicle charging Page 286 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO station that can provide power to charge only one (1) electric vehicle at a time, even though it may have multiple connectors;

Page 287 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (e) "Electric vehicle" has the same meaning as in KRS 186.010;

and Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (b) A surtax with an initial base rate of three cents ($0.03) per kilowatt hour is imposed on electric vehicle power distributed in this state by an electric vehicle power dealer when the electric vehicle charging station is located on state property.

Greater than a five percent (5%) decrease, in which case the taxes shall be ninety-five percent (95%) of the tax rates in effect at the Page 288 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO close of the previous calendar year.

(8) Every electric vehicle power dealer shall, by the twenty-fifth day of each month, transmit to the department reports, on the forms the department may prescribe, on Page 289 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the total kilowatt hours distributed and the amount of tax collected.

CHAPTER 161 131 (12) (a) Notwithstanding any other provisions of this chapter to the contrary, the president, vice president, secretary, treasurer, or any other person holding any equivalent corporate office of any corporation subject to the provisions of this chapter shall be personally and individually liable, both jointly and severally, for the taxes imposed under this chapter, and neither the corporate dissolution nor withdrawal of the corporation from the state nor the cessation of holding any corporate office shall discharge the foregoing liability of any person.

Page 290 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (c) No person will be personally and individually liable pursuant to this section who had no authority in the management of the business or financial affairs of the corporation at the time that the taxes imposed by this chapter become or became due.

(13) (a) Notwithstanding any other provisions of this chapter, KRS 275.150, 362.1-362.1-306(3) 306(3) or predecessor law, or 362.2-404(3) to the contrary, the managers of a limited liability company, the partners of a limited liability partnership, and the general partners of a limited liability limited partnership or any other person holding any equivalent office of a limited liability company, limited liability partnership, or limited liability limited partnership subject to the provisions of this chapter shall be personally and individually liable, both jointly and severally, for the taxes imposed under this chapter.

(15) The department may prescribe forms and promulgate administrative regulations to Page 291 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO execute and administer the provisions of this section.

]The department [also ]may require that the dealer keep a Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY complete record of all the gasoline sold by him or her, which records shall give the date of each sale, the number of gallons sold, the name of the person to whom sold, and the Page 292 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO sale price.

The Page 293 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO department may make any investigation deemed necessary to establish the bona fide claim of the loss;

(e) In the case of gasoline, receiving or accepting delivery within this state of gasoline for resale within this state in amounts of not less than an average of one hundred thousand (100,000) gallons per month during any prior Page 294 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO consecutive twelve (12) months' period, when in the opinion of the department, the person has sufficient financial rating and reputation to justify the conclusion that he or she will pay all taxes and comply with all other obligations imposed upon a dealer;

CHAPTER 161 133 (9)[(8)] "Diesel fuel":

6 fuel oils[oil] as described in ASTM specification D 396, or F-76 Fuel Naval Distillate MILL-MILL-F-166884; F-166884;

(a) Means all liquid fuels, including liquids ordinarily, practically, and Page 295 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO commercially usable in internal combustion engines for the generation of power, and all distillates of and condensates from petroleum, natural gas, coal, coal tar, vegetable ferments, and all other products so usable which are produced, blended, or compounded for the purpose of operating motor vehicles, showing a flash point of one hundred ten (110) degrees Fahrenheit or below, using the Eliott Closed Cup Test, or when tested in a manner approved by the United States Bureau of Mines, are prima facie commercially usable in internal combustion engines;[.] (b) Includes[The term "gasoline" as used herein shall include] casing head, absorption, natural gasoline, fuel grade ethanol, and condensates when used without blending as a motor fuel, sold for use in motors direct, or sold to those who blend for their own use;

(16)[(12)] "Motor vehicle" means any vehicle, machine, or mechanical contrivance propelled by an internal combustion engine and licensed for operation and operated upon the public highways and any trailer or semitrailer attached to or having its Page 296 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO front end supported by the motor vehicles;

and[.] Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (b) ["Quarterly survey value" ]Shall be determined exclusive of any federal gasoline tax and any fee on imported oil imposed by the Congress of the United States;

For the purpose of the proper administration of this chapter and to Page 297 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO prevent the evasion of the tax and to enforce the duty of the dealer to collect the tax, it shall be presumed that all gasoline and special fuel loaded by any licensed dealer within this state into tank cars or tank trucks is consigned to destinations within this state, unless the contrary is established by the dealer, pursuant to administrative regulations prescribed by the department;

(22)[(18)] "Special fuels" means and includes all combustible gases and liquids capable of being used for the generation of power in an internal combustion engine to propel vehicles of any kind upon the public highways, including diesel fuel, and dyed diesel fuel used exclusively for nonhighway purposes in off-highway Page 298 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO equipment and in nonlicensed motor vehicles, except that it does not include gasoline, aviation jet fuel, kerosene unless used wholly or in combination with special fuel as a motor fuel, or liquefied petroleum gas as defined in KRS 234.100;

CHAPTER 161 135 (4) Notwithstanding KRS 45.229, fund amounts not expended at the close of a fiscal year shall not lapse, but shall be carried forward to the next fiscal year.

Page 299 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (1) As used in this section and in KRS 186.043, 186.164, 186.166, 186.1722, and 186.174:

(a) Disabled veterans who receive assistance to purchase a vehicle from the United States Department of Veterans' Affairs, veterans declared by the Page 300 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO United States Department of Veterans' Affairs to be one hundred percent (100%) service-connected disabled, and recipients of the Congressional Medal of Honor:

persons who wish to receive Gold Star Mothers, Gold Star Fathers, or Gold Star Spouses license plates beyond the two (2) exempted from fees under KRS Page 301 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 186.041(6);

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY 1.

Initial Fee for two plates:$56plates: ($50 SF/$6 CF/$0 EF).

$56 ($50 SF/$6 CF/$0 EF).

Page 302 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 2.

CHAPTER 161 137 2.

$28 ($12 SF/$6 CF/$10 EF to Kentucky Page 303 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Heritage Land Conservation Fund established under KRS 146.570).

$41 ($25 SF/$6 CF/$10 EF to the Association of Independent Kentucky Colleges and Universities for distribution to the Page 304 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO general scholarship funds of the Association's members).

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY 2.

Page 305 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO 3.

$23 ($12 SF/$6 CF/$5 EF to the Friends of Page 306 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Kentucky Agriculture fund established under Section 98 of this Act[agricultural program trust fund established under KRS 246.247]).

The twenty-twenty-five five dollar ($25) fee required under this subsection shall be divided between the cabinet and the county clerk of the county where the applicant is applying for the license plate with the cabinet receiving twenty dollars ($20) and the county clerk receiving five dollars ($5).

CHAPTER 161 139 (4) (a) A sponsoring organization of any special license plate issued under this section or any special license plate established under the provisions of KRS 186.164 may petition the cabinet for the production of that special license plate for motorcycles.

(a) Identify the cost of issuing a child victims' trust fund special license plate Page 307 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO under subsection (2)(v) of this section;

Page 308 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (4) (a) If a special license plate issued under this chapter deteriorates to the point that the lettering, numbering, or images on the face of the plate are not legible, the plate shall be replaced free of charge, if the owner or lessee has not transferred the vehicle to which the plate was issued during the current licensing period.

A person applying for Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY a special license plate shall apply in the office of the county clerk in the county of the person's residence, except as provided in KRS 186.168(3).

All special license plates Page 309 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO issued under this chapter may be combined with a personalized license plate under the provisions of KRS 186.174.

and Page 310 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (g) The plate's lettering, logo, image, or message to be placed on the license plate, if created, shall not be obscene, as determined by the cabinet.

Any group or organization that receives a mandatory EF fee under KRS 186.162 shall maintain Page 311 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO the information required under subsection (13)(a) and (c) of this section with the Transportation Cabinet.

If the entity receiving funds under subsection (12) of this CHAPTER 161 141 section is not a state governmental agency, a program unit within a state governmental agency, or is a group or organization that does not have a statewide chapter, then a donation for use by the group or organization shall be prohibited;

Equal to or greater than two hundred thousand dollars ($200,000),[ and] the account shall be audited yearly at the expense of the group or organization, and[.] the completed audit shall be forwarded to the Page 312 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Transportation Cabinet;

A detailed summary of the activities supported by EF fee proceeds, Page 313 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO including the amount of money spent on each activity;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY 2.

Eligibility for a Gold Star Siblings license plate for a person whose Page 314 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO sibling died while serving the country in the United States Armed Forces.

(1) Each initial and renewal application by a person who meets the criteria of paragraph (a) of this section and each initial application by a person who meets the criteria of paragraph (b), (c), or (d) of this section for a special military license plate shall be accompanied by proof as set forth in subsection (10) of this section that the person is associated with the United States Army, United States Navy, United States Air Force, United States Marine Corps, United States Space Force, United States Coast Guard, United States Coast Guard Auxiliary, Kentucky National Guard, Merchant Page 315 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO Marines with service between December 7, 1941, and August 15, 1945, or Civil Air Patrol in one (1) of the following ways:

or CHAPTER 161 143 5.

The Department of Veterans' Affairs shall verify the Page 316 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO documentation submitted with the application for a Service Cross license plate, and if the individual applying for the plate is confirmed to be a recipient of the Distinguished Service Cross, Navy Cross, or Air Force Cross, the Department of Veterans' Affairs shall submit the applicant's name to the Transportation Cabinet's Division of Motor Vehicle Licensing not later than September 1 preceding the year that the Service Cross license plate is to be initially issued or renewed.

(5) A person who is certified by the Kentucky chapter of the Pearl Harbor Survivors Association as being a survivor of the attack on Pearl Harbor shall be eligible for a Pearl Harbor license plate and shall be required to attach to the special military-military-related related license plate application written evidence from the Kentucky chapter of the Pearl Harbor Survivors Association that the person:

Page 317 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO (a) Was a member of the United States Armed Forces on December 7, 1941;

The Transportation Cabinet shall promulgate administrative regulations pursuant to PageKRS 318Legislative ofResearch 386Commission HB075790.100PDF -Version 90ACTS -OF XXXXTHE 4/14/2026GENERAL 4:30ASSEMBLY PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO KRS Chapter 13A to establish the proof required to demonstrate current attendance at or graduation from a service academy.

military license Page 319 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO plates, military unit license plates, U.S.

(1) A taxpayer engaged in severing or processing coal within this Commonwealth that has paid the tax imposed under KRS 143.020 may apply for a refund equal to the amount of tax paid under KRS 143.020 if the coal is transported directly to a market Page 320 of 386 HB075790.100 - 90 - XXXX 4/14/2026 4:30 PM Vetoed in Part and Overridden UNOFFICIAL COPY 26 RS HB 757/VO outside of the United States of[North] America.