Rep. Deanna Gordon

Maddy summaryHB 1 reduces Kentucky's individual income tax rate from 4% to 3.5% for taxable years beginning on or after January 1, 2026. This change directly affects all Kentucky residents who file individual income tax returns. The bill permanently lowers the rate for the specified tax years, with the reduction taking effect after a review process that confirmed fiscal conditions were met. Governor Andy Beshear signed the bill into law on February 6, 2025 (Acts Ch. 1), making it effective for 2026 tax filings.

Amend KRS 37.170 to create the Kentucky Emergency Volunteer Corps (KEV Corps) within the Kentucky State Defense Force; create a new section of KRS Chapter 37 to detail KEV Corps eligibility, supervision, training requirements, uniform details, and prohibitions and to create the KEV Corps fund; amend KRS 39B.030 to permit the local emergency management director to use the KEV Corps during a local disaster or emergency; amend KRS 39B.050 to include the KEV Corps as a part of the local disaster and emergency services organization; amend KRS 39B.070 to permit each city, urban-county government, or charter county government the use of the KEV Corps.

Amend KRS 189.920, to allow wreckers to be equipped with a flashing, rotating, or oscillating blue light, to be used only when removing a vehicle or debris from the highway; prohibit a wrecker from using a blue light when towing a vehicle.

Direct the Transportation Cabinet to designate a portion of United States Route 25 in Madison County as the "Captain Samuel A. Manley Memorial Highway."

Amend KRS 139.495 to exempt purchases and sales of tangible personal property, digital property, or services made by qualifying resident nonprofit educational, charitable, or religious institutions from state sales and use taxes.

Amend KRS 164.295 to permit Eastern Kentucky University to offer doctor of osteopathic medicine degrees required for professional practice and licensure in osteopathic medicine.

Amend KRS 141.010 to define "tips" and "overtime compensation"; amend KRS 141.019 to allow an exclusion from gross income for tax purposes for tips and overtime compensation; amend KRS 141.335 to include tips and overtime compensation amounts on employee withholding statement; amend KRS 131.190 to allow the Department of Revenue to report on the exclusions.

Create a new section of KRS 217.005 to 217.215 to allow certain USDA-exempted poultry processors to sell to end consumers on a farm, at a farmers market, or at a roadside stand.

Create a new section of KRS Chapter 311A to establish the emergency medical services education grant program under the Kentucky Board of Emergency Medical Services to be used for student tuition support, agency support, and emergency medical services training or educational institution support.

Amend KRS 161.102 to require the Education Professional Standards Board to issue substitute teacher certificates based on education attained; specify the type of employment each certificate allows.