Technology

Establish Subtitle 13 of KRS Chapter 286 and create new sections thereof to regulate virtual currency kiosks; establish definitions; provide for enforcement by the commissioner of the Department of Financial Institutions; establish license requirements for virtual currency kiosks; require regulatory filings to be submitted to a nationwide licensing system registry; establish initial and renewal application processes and requirements, reporting, surety bond and tangible net worth, and change of control requirements for virtual currency kiosk operators; require the commissioner to promulgate administrative regulations to establish format, document submission, fee, and trade practice requirements for virtual currency kiosk operators; establish record retention requirements for persons required to be licensed as virtual currency kiosk operators; establish trade practice requirements relating to protection of resident assets, virtual currency kiosk transactions, prohibited practices, and fraud and information security compliance procedures; authorize the commissioner to conduct investigations and examinations; provide for the confidentiality of certain documents provided to the commissioner; authorize the commissioner to share, disclose, and report information and take other actions to assist in the commissioner's duties; require the commissioner to submit an annual licensing report to the Legislative Research Commission; establish due process requirements for adverse actions taken by the commissioner against licensees and other persons; establish requirements for the denial, suspension, or revocation of a license; authorize the commissioner to enter cease and desist orders and emergency orders; authorize the commissioner to order civil penalties against persons that violate the subtitle; require the commissioner of the Department of Financial Institutions to promulgate any required emergency and ordinary administrative regulations on or before January 1, 2027; EFFECTIVE, in part, March 31, 2027.

HB 825 amends Kentucky law to update the definitions of digital assets and related blockchain terminology. The bill directly affects individuals, businesses, and financial institutions operating within the state by clarifying what terms like cryptocurrency, stablecoins, and smart contracts mean in legal contexts. Key provisions include establishing specific definitions for hardware wallets, self-hosted wallets, and third-party wallets, as well as defining staking and staking as a service. These changes aim to provide clearer legal language for existing statutes rather than creating new regulations or tax rules.

Amend KRS 154.32-010, relating to the Kentucky Business Investment Program, to add laboratory equipment, computer servers, software, capitalized leases, and leasehold improvements directly related to research and development, headquarters, high-technology operations, or service sector facilities to the definitions of "eligible costs" and "start-up costs," respectively.

Amend KRS 230.210 to define various terms; create new sections of KRS Chapter 230 to authorize the Kentucky Horse Racing and Gaming Corporation to regulate the conduct of fantasy contest operators; require the use of geolocation technology; require fantasy contest operators to implement procedures to prevent fraud, abuse, and money laundering; require notification to the corporation for a confirmed breach of a sport's governing body's internal rules and codes of conduct, conduct that corrupts any outcome, and confirmed illegal activities; establish licensing requirements for a fantasy contest operator; allow the corporation to promulgate administrative regulations to establish additional qualifications and requirements for licensing to preserve the integrity and security of fantasy contests; prohibit a license from being issued to a person that has been convicted of a felony, crime involving illegal gaming or gambling, or any crime involving theft or fraud; require a fantasy contest operator to conduct an independent audit; require a fantasy contest operator to be at least 21 years old; require the corporation to investigate all reasonable allegations of prohibited conduct; require each fantasy contest operator to include a statement regarding obtaining assistance with real-money gaming problems on the operator's website or mobile application; prohibit a fantasy contest operator from paying any price or award to a person who is on the self-exclusion list; create a new section of KRS Chapter 230 to establish the purse stabilization fund from fixed-odds wagers on horse racing taxes and fees; amend KRS 138.552 to define "fixed-odds wagering"; impose a 15% excise tax on the adjusted gross revenue of fixed-odds wagers on live horse racing; amend various sections of KRS Chapter 230 to establish the corporation's jurisdiction over fantasy contests and fixed-odds wagering; establish the Attorney General's concurrent jurisdiction with the Commonwealth's attorneys and county attorneys of this state for the enforcement of KRS Chapter 230 and 238; require the corporation to establish a process for the compilation, dissemination, and notification of the self-exclusion list; allow the corporation to authorize additional racing dates or amend racing dates; define "affiliate" and "beneficial interest"; prohibit an association or track or its affiliate from holding a license to conduct charitable gaming; require associations and tracks to accelerate the adoption of technologies, update the totalizator by April 1, 2027, and update technologies related to pari-mutuel wagering annually; require associations and tracks to disable all wagering simultaneously, but not later than the moment the starting gate is opened for commencement of a race; change the age of access to sports wagering from 18 to 21; allow a track to conduct fixed-odds wagering on horse racing; require a track or service provider to have a mandatory minimum hold of at least $2,000 per race; define "proposition bet"; prohibit sports wagering licensees and service providers from offering any proposition bets on individual players participating in collegiate sporting events; prohibit a track or association from participating in or contracting with platforms that offer events contracts through prediction markets; prohibit a track or association from contracting with a service provider that offers events contracts through a prediction market; amend various sections of KRS Chapter 238 to redefine "chairperson" and "charitable gaming facility"; define "licensed charitable gaming facility"; establish the power of the office relating to licensure issuance and renewal and imposing fines and penalties; require a background check for any person associated with an applicant if the corporation deems it necessary; change the distributor and manufacturer licensing fee from $1,000 to $5,000; change the charitable organization's licensing fee from $300 to $1,000; require an applicant to submit an application at least 60 days prior to the expiration of its existing license or its first expected date of operation; prohibit a person under the age of 21 from participating in the play of charitable gaming activities or events; increase the limit for a prize for an individual charity game ticket from $599 to $1,499; establish an affirmative defense for any prosecution for selling charitable gaming supplies to a minor if the sale was induced by the use of false identification; change the charitable gaming facility licensing fee from $2,500 to $5,000; prohibit an owner or affiliate of a licensed charitable gaming facility from soliciting licensed charitable organizations or holding a distributor license under KRS Chapter 238; allow the corporation to investigate and have free access to the office or place of business of a charitable gaming license or facility where licensed charitable gaming is offered; increase the administrative fine for a violation of KRS Chapter 238 from $1,000 to $5,000; allow a person to apply to the corporation for a stay of the ruling of the notice of violation; require a summary suspension to cease operations if there is an imminent risk to the health and safety of the public or a misappropriation of charitable gaming revenues; repeal and reenact KRS 238.538 to require a licensed charitable organization to only offer the play of electronic devices at locations authorized by the corporation and one additional location in either the same county or a county that is contiguous to the charitable organization's office location; require a charitable gaming facility to transfer its license first to one of the licensed charitable organizations it is affiliated with as of January 1, 2026, and next to any licensed charitable organization; prohibit a charitable gaming facility from transferring more than 3 licenses from locations where persons 21 years old and under are permitted to locations where only persons 21 years or older are permitted within 90 days of the effective date of this Act; establish the occurrences in which the play of charitable gaming devices shall be lost and forfeited at an additional location; amend KRS 243.500, 436.480, 525.090, 528.010, and 528.070 to exempt fantasy contests, fixed-odds wagering, and wagering on live horse races and historical horse races; amend KRS 2.015, 68.182, 91.202, 92.282, and 238.550 to conform; require the corporation to present a status report on the purse stabilization fund not later than November 30, 2027; provide that the Act may be cited as the Wagering Consumer Protection Act.

This bill amends Kentucky law to update language in the education code to be gender-neutral. It directs the Kentucky Board of Education to create a program helping certified teachers purchase personal computers at discounted rates through competitive bidding. The program would also include training on computer use provided by the vendor selected for the contract. The changes affect all certified teachers in Kentucky and modify the statutory language to use inclusive terms.

Amend various sections and create new sections of Subtitle 11 of KRS Chapter 286 to expand the scope of the subtitle to include virtual currency kiosk business; define terms; require licensure for virtual currency kiosk business in this state; require each virtual currency kiosk business location to be approved by the commissioner of the Department of Financial Institutions; require each application for a license to engage in virtual currency kiosk business to be accompanied by a surety bond or other similar security; establish requirements for approval to engage in virtual currency kiosk business at a location in this state; apply examination, investigation, recordkeeping, registered agent, and trade practice requirements to virtual currency kiosk operators; establish reporting, transaction, trade practice, notice, disclosure, fraud detection, and refund requirements for virtual currency kiosk operators; apply license and civil penalties to virtual currency kiosk operators; authorize the commissioner to order any virtual currency kiosk operator to provide refunds and to direct any peace officer to seize, impound, or render inoperable a virtual currency kiosk; establish the purpose of the Act; amend KRS 286.2-015 to authorize political subdivisions of this Commonwealth to enact and enforce ordinances, regulations, and resolutions pertaining to virtual currency kiosk business; create a new section of KRS Chapter 367 to provide that a violation of Subtitle 11 of KRS Chapter 286 by a virtual currency kiosk operator shall be deemed a violation of, and subject to the remedies and penalties of, KRS 367.170; repeal KRS 286.11-065, relating to licenses issued under former KRS Chapter 366; require the commissioner to promulgate emergency and ordinary administrative regulations to implement the Act within 30 days after the effective date of the Act; provide that persons shall not be required to comply with licensing and other provisions of the Act until certain contingencies are satisfied.

Create a new section of KRS Chapter 61 to define "data center," "nondisclosure or confidentiality agreement," and "public agency"; prohibit public agencies from entering into a nondisclosure or confidentiality agreement relating to a data center that expands confidentiality beyond what is authorized by the Kentucky Revised Statutes; provide that contractual provisions relating to data centers that waive, supersede, or expand the requirements of the Kentucky Open Records Act or Kentucky Open Meetings Act are void; provide that certain information be made publicly available when certain data center-related actions are taken or documents are executed; provide that aggregated data concerning projected or actual impacts on public utilities and certain other public areas shall not be deemed confidential solely because the information relates to a data center project; prohibit a nondisclosure or confidentiality agreement from restricting the authority of a local public official to discuss data center impacts or public participation, hearings, or proceedings otherwise require by law.

Create a new section of KRS 157.200 to 157.290 to define terms; require a school district to install and maintain a video and audio surveillance system in every self-contained special education classroom; require a public school to notify a parent of each child in the classroom of the system and the parent's rights within 5 days; permit parents of recorded students access to system footage; require reasonable redaction and segregation to protect student privacy; designate a retention schedule for system footage; require school districts to notify the parents of each student present for an injury in a self-contained special education classroom; amend KRS 157.200 to define "parent" and amend the definition of "special education."

Create a new section of KRS 369.130 to 369.139 to define "wallet provider"; require wallet providers to provide live customer service during operating hours and to provide a mechanism for, and assistance with, resetting any password, pin, seed phrase, or other similar information necessary to access the contents of a wallet; provide that a violation of the section is an unfair, false, misleading, or deceptive trade practices in violation of KRS 367.170; provide that the remedies and penalties are cumulative; authorize the Attorney General to promulgate administrative regulations for the proper enforcement of the section.

Amend KRS 525.080, relating to harrassing communications, to include sending repeated electronic communications in a manner reasonably likely to harass, annoy, alarm, torment, embarass, or offend another and include posts to social media or an internet website any material that is reasonably likely to cause emotional distress, abuse, or torment; elevate harassing communications from a Class B misdemeanor to a Class A misdemeanor.