Budget & Taxes

Propose to amend Section 170 of the Constitution of Kentucky to increase the homestead exemption to $100,000; require the homestead exemption amount to be indexed every year; provide ballot language; submit to voters for ratification or rejection; apply to property assessments beginning on or after January 1, 2027.

Amend KRS 205.5371 to require the Cabinet for Health and Family Services to condition eligibility for enrollment or continued enrollment in the Medicaid program on demonstrated community engagement as required under federal law; require the cabinet to continue to condition eligibility on demonstrated community engagement if federal requirements are abolished, repealed, or otherwise diminished; amend KRS 205.6312 to require the cabinet and any contracted Medicaid managed care organization to impose cost-sharing requirements for Medicaid enrollees as required under federal law no later than January 1, 2027; establish minimum cost-sharing amounts; amend KRS 205.556 and 205.618 to conform; create new sections of KRS Chapter 205 to require the cabinet to, no later than July 1, 2026, begin conducting Medicaid eligibility redeterminations once every 6 months as required under federal law; require the cabinet to access and review certain data when conducting eligibility redeterminations; establish a process for identifying and, when appropriate, disenrolling individuals who are concurrently enrolled in the Kentucky Medicaid program and a Medicaid program administered by another state or states; amend KRS 205.178 to require the cabinet to receive and review information from the Kentucky Lottery Corporation, Department of Corrections, and the Kentucky Horse Racing and Gaming Corporation on at least a monthly basis, the Kentucky Department of Revenue on at least an annual basis, and the Kentucky Transportation Cabinet on a quarterly basis; require the Department for Medicaid Services to enter into a data sharing agreement with the Social Security Administration to receive the full file of death information on at least a quarterly basis; prohibit the cabinet from seeking or requesting an exemption or waiver from federal community engagement requirements related to county unemployment rates unless specifically authorized by the General Assembly to do so; amend KRS 205.5375 to require hospitals to assist presumptively eligible individuals in submitting a full Medicaid application; amend KRS 205.200 to prohibit the cabinet from accepting self-attestation of income, residency, or age for the purpose of determining eligibility for Medicaid or compliance with community engagement requirements; create new sections of KRS Chapter 205 to establish Medicaid managed care organization contracting requirements and penalties; establish the Medicaid managed care organization compliance fund within the State Treasury; establish that amounts in the fund not appropriated at the close of a fiscal year shall not lapse and shall be carried forward; prohibit the expenditure of funds in the account unless expressly appropriated by the General Assembly; require the Department for Medicaid Services to submit recommendations for use of monies in the fund to the Legislative Research Commission by November 1, 2027, and November 1, of each following odd-numbered year; amend KRS 205.533 to require Medicaid managed care organizations to include certain information for providers on their websites; amend KRS 205.534 to require managed care organizations to allow providers 120 days to file an appeal or grievance related to a reduction of denial of a claim; establish penalties for a managed care organization's failure to ensure the timely disposition of any appeal or grievance; require payment of any amount owed to a provider following an appeal to be paid within 30 days; require payments made following an appeal to include interest and reasonable attorney's fees; establish standards and requirements for provider audits; require the inclusion of additional information in the monthly report filed by managed care organizations; require the Department for Medicaid Services to submit an annual report to the Legislative Research Commission related to Medicaid claims, appeals, and grievances; authorize the Department for Medicaid Services to promulgate administrative regulations; create new sections of KRS Chapter 205 to establish requirements for administration of the Medicaid-covered nonemergency medical transportation services; establish requirements for the administration of 1915(c) Medicaid waiver programs; require the Department for Medicaid Services to develop and implement a tiered priority system for assigning 1915(c) Medicaid waiver program slots by January 1, 2027; require administration of Medicaid-covered dental services by an administrative service organization; establish that the administrative service organization shall not assume any financial or insurance risk; limit compensation paid to the administrative service organization to no more than 2% of the actual Medicaid-covered dental service claims paid on an annual basis; require the Department for Medicaid Services to establish a Dental Program Advisory Panel; require the Department for Medicaid Services to employ a dental director; require the Department for Medicaid Services to submit an annual report on the Medicaid dental program to the Legislative Research Commission; create new sections of KRS 7A.270 to 7A.290 to establish legislative findings; require the cabinet to provide the Legislative Research Commission with access to all databases, datasets, electronic records, and files pertaining to any aspect of the Medicaid program determined by the director of the Legislative Research Commission to be necessary for the meaningful and effective discharge of the General Assembly's legislative duties; require the Legislative Research Commission, the University of Kentucky, and the University of Louisville to enter into a partnership to design and develop a web-based healthcare transparency dashboard; require the dashboard be overseen by a subcommittee of the Medicaid Oversight and Advisory Board; require the dashboard be maintained and operated by the Legislative Research Commission; amend KRS 7A.283 to allow the appointment of individuals who are not members of the board to advisory committees or subcommittees upon approval of the Legislative Research Commission; create a new section of KRS Chapter 43 to require the Auditor of Public Accounts to conduct an examination of the state's Medicaid program and Kentucky Children's Health Insurance Program; establish audit reporting requirements; require the Auditor to conduct a review of the Medicaid program and Kentucky Children's Health Insurance Program to assess progress in addressing issues identified in previous examinations; establish that the Office of Program Performance in the Commonwealth Office of the Ombudsman shall conduct all quality control reviews of the Department for Community Based Services for the Medicaid program, Supplemental Nutrition Assistance Program, and Temporary Assistance for Needy Families to comply with federal law and regulations; establish that no other state agency shall conduct these quality control reviews unless otherwise authorized by the General Assembly; amend KRS 7A.286 to establish that examinations conducted by the Auditor may constitute fulfillment of certain duties assigned to the Medicaid Oversight and Advisory Board at the discretion of the Legislative Review Commission; repeal KRS 205.515 related to administration of the Medicaid program; repeal KRS 311A.172 related to nonemergency medical transportation services; appropriate $500,000 in General Fund moneys in fiscal year 2025-2026 for staffing and technology needs in the Office of the Auditor of Public Accounts; create a new section of KRS Chapter 6 to establish a Medicaid impact statement; require any legislation that makes or directs a change to the Medicaid program to be accompanied by a Medicaid impact statement; require certain factors to be analyzed and included in a Medicaid impact statement; require Medicaid impact statements to be completed by an economic consulting firm retained by the Legislative Research Commission; create a new section of KRS Chapter 13A to require the cabinet to provide a draft copy of certain administrative regulations related to the Medicaid program to the Medicaid Oversight and Advisory Board for comment at least 30 days before filing the administrative regulation with the regulations compiler; direct the Medicaid Oversight and Advisory Board to establish a Dental Services Transition Subcommittee; establish membership and duties of the Dental Services Subcommittee; require any contract between the Department for Medicaid Services and a Medicaid managed care organization entered into, renewed, or extended after the effective date of this Act to include notice to the managed care organization of the department's intent to transition to an administrative service organization delivery model for Medicaid-covered dental services; require the cabinet or the Department for Medicaid Services to seek federal approval if it is determined that such approval is necessary; provide authorization from the General Assembly to make changes in the Medicaid program as required under KRS 205.5372(1); direct the Medicaid Oversight and Advisory Board to evaluate the nonemergency medical transportation program and submit findings and recommendations to the Legislative Research Commission by December 31, 2026; APPROPRIATION; EMERGENCY.

Create a new section of KRS Chapter 194A to create the homelessness prevention fund to be administered by the Cabinet for Health and Family Services for continuum of care funds; specify eligible uses and eligible entities; amend KRS 198A.027 to allow appropriations to be used for homeless initiatives; appropriate $2,000,000 from the budget reserve trust fund to the homelessness prevention fund; APPROPRIATION; EMERGENCY.

Create a new section of KRS Chapter 141 to allow a contribution to be made to the autism spectrum disorder trust fund through an income tax refund designation effective for taxable years beginning on or after January 1, 2026; require the designation to be printed on the face of the individual income tax form; require a description of the trust fund in the individual income tax return instructions; require the Department of Revenue to transfer the funds designated to the autism spectrum disorder trust fund; create a new section of KRS Chapter 211 to create the autism spectrum disorder trust fund; amend KRS194A.624 to require the Advisory Council on Autism Spectrum Disorders to administer the trust fund; require the Cabinet for Health and Family Services to submit an annual report to the Governor and the Legislative Research Commission and to promulgate administrative regulations; EMERGENCY.

Propose to create a new section of the Constitution of Kentucky to exempt homeowners who are 65 years of age or older from any increase in the valuation of their permanent residence that is assessed after the later of the year the homeowner turned 65 or the year the homeowner acquired the property; require the exemption to be in addition to the exemption provided in Section 170 of the Constitution of Kentucky and notwithstanding Sections 171, 172, and 174 of the Constitution of Kentucky; apply the exemption to increases in valuation that occur after the date the amendment is ratified by the voters; provide ballot language; submit to voters for ratification or rejection.

Create a new section of KRS Chapter 141 to establish the qualified home modification credit against the tax imposed in KRS 141.020; amend KRS 141.0205 to order the credit; amend KRS 131.190 to allow the Department of Revenue to report on the credit.

Amend KRS 141.019, relating to income tax, to define "professional membership dues" and "union dues"; allow a deduction from gross income for union dues and professional membership dues paid for taxable years beginning on or after January 1, 2027, but before January 1, 2031, and require the Department of Revenue to annually report information about this deduction to the Legislative Research Commission; amend KRS 131.190 to allow the department to report on the exclusion.

Amend KRS 75.040 to establish conditions under which a fire protection district or volunteer fire department district may exceed the maximum established tax rate; create a new section of KRS Chapter 75 to establish the procedure by which a fire protection district or volunteer fire department district may exceed the maximum tax rate set in KRS 75.040 by requiring a public hearing and notification to the public; establish the methods by which the public may recall the portion of the levy that increases the tax beyond the previous year's rate; exempt the rates from the provisions of KRS 132.023; amend KRS 75A.050 to establish conditions under which a fire district may exceed the maximum established tax rate; create a new section of KRS Chapter 75A to establish the procedure by which a fire district may exceed the maximum tax rate set out in KRS 75A.050 by requiring a public hearing and notification to the public; establish the methods by which the public may recall the portion of the levy that increases the tax beyond the previous year's rate; exempt the rates from the provisions of KRS 132.023; amend KRS 75.015 to conform; EFFECTIVE January 1, 2027.

Amend KRS 143A.030 to remove fluorspar from the severance tax exemption and make it taxable as a natural resource; amend KRS 143A.010 to add fluorspar to the definition of "natural resources."

Propose to create a new section of the Constitution of Kentucky to exempt from taxation a portion of the assessed value of real property maintained as the permanent residence of an owner who is a veteran or first responder; require an owner to meet the disability requirements under Section 170 of the Constitution of Kentucky; allow real property maintained as the permanent residence of the surviving spouse of a veteran or first responder to receive an exemption based on the qualifiers of the veteran or first responder prior to his or her death; allow the General Assembly to set qualification requirements by law; prohibit a property from receiving more than 1 exemption under this new section of the Constitution of Kentucky; allow the exemption to be in addition to the exemption provided in Section 170 of the Constitution of Kentucky; provide that the exemptions supersede contrary provisions of Sections 171, 172, and 174 of the Constitution of Kentucky; apply the exemptions to property assessed on or after January 1, 2028; provide ballot language; submit to voters for ratification or rejection.