SENATE PASSES WHEELER BILL TO EXPAND ECONOMIC DEVELOPMENT TOOLS FOR RURAL KENTUCKY

FRANKFORT, KY. (March 6, 2026)—Legislation sponsored by Sen. Phillip Wheeler, R-Pikeville, aimed at strengthening economic development opportunities in rural Kentucky passed the Senate today.

Senate Bill (SB) 197 establishes a tiered incentive structure within Kentucky’s existing economic development programs to help direct additional tools and resources to counties experiencing population loss and higher unemployment. The legislation updates the Kentucky Business Investment (KBI) program to better position rural communities to compete for new investment and job creation.

“Kentucky has seen significant economic development success in recent years, but those investments have not reached every region of the commonwealth,” Wheeler said. “This legislation helps ensure rural communities have the tools needed to compete for new opportunities and attract long-term investment.”

Under the bill, counties will be classified into four tiers based on population and five-year average unemployment rates. Counties identified as Tier III and Tier IV will be considered “heritage communities” and may qualify for enhanced incentives designed to offset higher development costs often faced in rural areas.

SB 197 also expands the types of companies eligible for incentives under the KBI program to include research and development operations and other high-skill industries.

A Senate floor amendment adopted during consideration of the bill allows certain large economic development projects located outside Kentucky to qualify if they are within 20 miles of a Tier IV Kentucky county, employ at least 250 full-time workers, and are located in states that maintain reciprocal tax agreements with the Commonwealth. Wheeler said the provision recognizes the reality that many Kentuckians in border communities commute across state lines for work.

“In eastern Kentucky and other border regions, our workforce often crosses state lines every day,” Wheeler said. “This amendment ensures Kentucky communities can still benefit from major job opportunities located nearby while strengthening the broader regional economy.”

Wheeler said the measure is intended to help create more balanced economic growth across the commonwealth.

“When we create opportunities in rural Kentucky, we strengthen the entire state,” Wheeler added. “This legislation provides a practical framework to help communities that have worked hard but need additional tools to compete.”

SB 197 now heads to the Kentucky House of Representatives for consideration.

Learn more about bills, committees, and other important updates on the 2026 Regular Session at www.kylegislature.gov.

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Sen. Phillip Wheeler, R-Pikeville, represents Kentucky’s 31st Senate District, including Elliott, Johnson, Lawrence, Martin, and Pike Counties. Wheeler serves as chair of the Senate Economic Development, Tourism, and Labor Committee and vice chair of the Senate Judiciary Committee. He is also co-chair of the Capital Planning Advisory Board. Additionally, Wheeler is a member of the Senate Committees on Transportation, Natural Resources and Energy, and Licensing and Occupations.