FRANKFORT — The Kentucky General Assembly concluded its 2026 session Thursday without passing major legislation addressing affordable housing incentives and data center development tax credits, leaving both proposals dead until at least 2027.
The failed housing bill (HB 412) would have created tax increment financing districts for mixed-income developments, while the data center proposal (SB 238) offered sales tax exemptions for server farm construction. Both measures passed their originating chambers but stalled in committee during the session’s final days.
“This represents a missed opportunity to address Kentucky’s 38,000-unit housing shortage,” said a staffer for the House Appropriations Committee who requested anonymity to speak candidly. Legislative analysts estimate the data center bill could have attracted $2 billion in tech investments.
The failures come amid record budget surpluses exceeding $1.4 billion. Some lawmakers argued these funds should prioritize education and infrastructure over corporate incentives. The bills may be reintroduced when the legislature reconvenes in January 2027.