KY — State Policy Updated 2026-07-17

Kentucky

1) Incentive programs

  • State sales/use tax exemption for data center equipment (KRS 139.499): Kentucky exempts qualifying data center equipment purchased for a qualified project operating under a KEDFA memorandum of agreement and a Department of Revenue certificate of exemption; the exemption covers purchases, installation, repair, and replacement of eligible equipment. Justia/KRS 139.499, 2026-06-10 Kentucky LRC HB 8 Acts Ch. 166, 2024-04-12
  • Eligibility thresholds (expanded statewide in 2025): HB 775 (Acts Ch. 98) expanded eligibility beyond Jefferson County by setting minimum investment thresholds tied to county population: $450 million in counties with population of at least 100,000, $100 million in counties with population 50,000 to 99,999, $25 million in counties with population of 50,000 or less, and $150 million for a project organizer. Kentucky LRC HB 775 record, 2025-03-28 Kentucky LRC HB 775 enrolled bill, 2025-03-28
  • Term / duration of benefits: KEDFA’s April 2026 incentive chart lists MOA terms of 15 years for a project organizer, 50 years for projects meeting the $450 million threshold, and 25 years for projects meeting the lower county-population thresholds. Kentucky Cabinet for Economic Development, 2026-04-30
  • Non-stacking rule: The qualified data center framework excludes projects that apply for or accept other economic development incentives under KRS Chapter 154. Kentucky LRC HB 775 enrolled bill, 2025-03-28
  • Reporting requirements: Beginning September 1, 2025, preliminarily approved companies must report annually to the Department of Revenue, and the Department must report to KEDFA and the Interim Joint Committee on Appropriations and Revenue by November 1 each year. Justia/KRS 139.499, 2026-06-10
  • KEDFA application guidance added in 2026: The Cabinet’s April 30, 2026 chart adds process expectations before preliminary approval, including due diligence, a draft MOA, a community benefits report, an analysis of local and regional utility impacts, local elected-official endorsement, a decommissioning plan, and capital-investment verification; before final approval, the company must satisfy the MOA conditions within five years. Kentucky Cabinet for Economic Development, 2026-04-30
  • Clean energy / sustainability conditions: The state incentive statutes and Cabinet chart do not impose a renewable-energy procurement condition for eligibility; the 2026 Cabinet chart instead focuses on investment thresholds, local endorsement, community benefits, utility impacts, and decommissioning. Kentucky Cabinet for Economic Development, 2026-04-30 Kentucky LRC HB 775 enrolled bill, 2025-03-28
  • 2026 incentive oversight, not expansion: HB 869 became Acts Ch. 198 and directs the Cabinet for Economic Development to report to LRC by August 1, 2027 on tax credits and incentives for hyperscale data centers and data centers in Kentucky and surrounding states; it did not create a new data-center incentive during the 2026 regular session. Kentucky LRC HB 869 record, 2026-04-27

2) Restrictions and moratoriums

  • Oldham County moratorium (2025; later extended): Oldham County adopted KOC 25-910-508, a 150-day moratorium on data center and related private-utility applications, and later listed KOC 25-910-520 as a moratorium extension. Oldham County Fiscal Court, 2025-05-06 Oldham County Fiscal Court public notices, 2026-06-10
  • Meade County moratorium corrected to adopted status: Meade County Ordinance 2025.07 imposed a 12-month moratorium on establishment, expansion, or construction of data centers and directed Planning and Zoning to study impacts; the county posted second-reading/adoption notice for January 13, 2026, so the prior “first reading” status is no longer current. Meade County Ordinance 2025.07, 2025-12-09 Meade County second-reading notice, 2026-01-13
  • Mason County zoning rules and rezoning approval: Mason County adopted data-center regulations for unincorporated areas in Ordinance 26-01 and later approved Ordinance 26-03 rezoning 28 properties totaling about 2,080 acres north of Germantown Road to I-3 Rural Industrial for a proposed data center project; the Maysville/Mason County page records second reading on May 22, 2026. City of Maysville/Mason County, 2026-05-27
  • Franklin/Simpson County project approval and litigation: Franklin Planning and Zoning unanimously approved TenKey LandCo’s preliminary development plan on March 3, 2026 for three 200,000-square-foot facilities with on-site power manufacturing off I-65; a local citizens group filed suit on April 2 challenging the approval. WKYU, 2026-03-04 WBKO, 2026-04-06
  • Daviess County moratorium: Daviess County adopted KOC 921.690 on May 28, imposing a temporary moratorium on acceptance and processing of I.T. infrastructure applications; contemporaneous local reporting described the proposal as a 12-month data-center moratorium after resident concerns about noise, water use, and grid strain. Daviess County Fiscal Court, 2026-05-28 Spectrum News 1, 2026-05-16
  • Cave City moratorium and lawsuit: Cave City enacted a 12-month moratorium on data-center applications by a 4-1 final vote in May 2026; Kentucky Industrial Alliance then sued Cave City over the moratorium in June. WBKO, 2026-05-21 WBKO, 2026-06-09
  • Lexington-Fayette moratorium and draft rules: Lexington’s Urban County Council voted unanimously on June 9 to halt zone changes, development-plan approvals, and permits for data centers until October 31. The city released a draft zoning-text amendment on June 25 and held a Planning Commission work session July 16; the public hearing was scheduled for July 30, so permanent rules had not been adopted by this cutoff. Engage LexingtonKY, 2026-06-29
  • Additional adopted county pauses: Allen County placed a 24-month moratorium in effect by June 10; Boyle County posted a resolution enacting a temporary moratorium on June 9; and Butler County approved a one-year moratorium in late June. WNKY News 40, 2026-06-10 Boyle County Fiscal Court, 2026-06-09 WBKO, 2026-06-26
  • July county and city actions: Nelson County adopted a one-year moratorium in July, while London’s city council drafted—but had not yet enacted—a two-year pause. Boyd County adopted a six-month moratorium on July 9 that exempted the already-planned Muskie campus. Georgetown City Council adopted a resolution supporting a Scott County moratorium through year-end and directing the joint planning commission to recommend regulations; Jessamine County and Nicholasville were still considering or drafting pauses rather than having enacted them. Spectrum News 1, 2026-07-13 WCHS/Yahoo News, 2026-07-09 WKYT, 2026-07-13 WKYT, 2026-07-10
  • Bowling Green enacted zoning standards: After rejecting two proposed pauses, Bowling Green unanimously adopted Ordinance BG2026-6 on second reading June 16, adding data-center standards addressing matters including energy and water demand, noise, light, setbacks, and site design. City of Bowling Green, 2026-06-19 WNKY News 40, 2026-06-17
  • Murray interim pause and pending ordinance: Murray enacted a one-week moratorium on June 11 while its Planning Commission revised proposed industrial-zone rules. The proposal remained under consideration, and no final adoption was located by July 17. WKMS, 2026-06-10 WKMS, 2026-06-11
  • Mercer/Burgin and Louisville remained pending: Mercer County released revised draft standards in July, and on July 14 Fiscal Court asked its attorney to draft a moratorium; neither was final by the cutoff. Burgin had given first reading to annexation of nearly 1,000 acres associated with a proposed hyperscale project. Louisville released draft code amendments and took public comment, but proposed moratorium O-135-26 remained postponed in committee with a July 21 meeting scheduled after this cutoff. Harrodsburg Herald, 2026-07-10 Harrodsburg Herald, 2026-07-16 Louisville Metro Council agenda, 2026-07-06
  • Ashland pause: Ashland adopted a six-month pause on new data-center applications in February. WSAZ, 2026-02-26
  • Water withdrawals: Water withdrawal permits are required for withdrawals greater than 10,000 gallons per day unless exempt; data centers with significant cooling-water demand remain subject to this permitting framework. 401 KAR 4:010, 2026-06-10 Kentucky Energy and Environment Cabinet, 2026-06-10
  • Discharges / other water permits: Discharges to waters of the Commonwealth require KPDES permits, and floodplain or no-discharge operational permits can apply depending on project design. Kentucky Energy and Environment Cabinet, 2026-06-10

3) Local governance

  • Local zoning authority remains primary: KRS Chapter 100 places zoning-map amendments with local legislative bodies after planning-commission review, while boards of adjustment handle conditional use permits. KRS 100.211, 2026-06-10 KRS 100.237, 2026-06-10
  • Local control in practice expanded sharply in 2026: By July 17, adopted pauses, zoning rules, rezoning decisions, pending ordinances, or litigation extended across at least Mason, Simpson, Daviess, Barren/Cave City, Fayette, Boyd, Allen, Boyle, Butler, Nelson, Scott/Georgetown, Ashland, Murray, Bowling Green, Mercer/Burgin, and Louisville. Kentucky Lantern, 2026-07-07 Spectrum News 1, 2026-07-13
  • Community opposition patterns: Public opposition continued to focus on land use, water demand, electric-grid costs, utility-rate impacts, noise, local fiscal benefits, transparency, and the limited number of permanent jobs. Kentucky Center for Economic Policy, 2026-05-26 CivicLex Weekly, 2026-06-09 WKYU, 2026-03-04

4) Legislative activity (2024-2026)

  • 2024 - HB 8 (Acts Ch. 166): Created Kentucky’s qualified data center project framework and the sales/use tax exemption under KRS 139.499. Kentucky LRC HB 8 Acts Ch. 166, 2024-04-12
  • 2025 - HB 775 (Acts Ch. 98): Expanded eligibility statewide through county-population investment thresholds and longer MOA terms for large projects. Kentucky LRC HB 775 record, 2025-03-28
  • 2026 - HB 593 died after House passage: HB 593 would have required data-center electric-service contracts, utility tariffs, nonrefundable application fees, service studies, minimum contract terms, and protections against allocating electric, gas, water, or wastewater infrastructure costs for data centers to other customers; it passed the House 90-8 on March 4 but its last action was return to the Senate Economic Development, Tourism and Labor Committee on March 31, so it was not enacted. Kentucky LRC HB 593 record, 2026-06-05
  • 2026 - HB 544 died in committee: The Kentucky Ratepayer Protection Act would have required a PSC-approved tariff or contract before service to data centers with aggregate demand above 100 MW and generally assigned the capital and operating costs of data-center-specific infrastructure to those customers. It received no hearing or vote after its February 10 referral to House Small Business and Information Technology. Kentucky LRC HB 544 record, 2026-07-10
  • 2026 - HB 856 died in committee: HB 856 would have required a pre-operation water-availability study and annual data-center water-use reporting to the Energy and Environment Cabinet; it did not advance after its March 10 committee referral. Kentucky LRC HB 856 record, 2026-07-10
  • 2026 - SB 319, SB 330, and HB 937 died: SB 319 proposed decommissioning plans, surety, and local review for data centers on agricultural land; SB 330 proposed limits on development-related nondisclosure agreements plus Open Records/Open Meetings and aggregate utility-impact disclosures; and HB 937 proposed a broad high-impact-technology siting process with ownership disclosure, public impact reports, site review, notice, and binding community-benefit commitments. None advanced beyond committee referral. Kentucky LRC SB 319 record, 2026-06-05 Kentucky LRC SB 330 record, 2026-07-10 Kentucky LRC HB 937 record, 2026-06-05
  • 2026 - SB 197 data-center language was removed: A House committee substitute temporarily added HB 593-style utility protections to SB 197, but the final House substitute removed that language and the enacted bill became a supplemental appropriations measure. It should not be counted as an enacted data-center law. Kentucky LRC SB 197 record, 2026-04-27
  • 2026 - HB 869 enacted data-center incentive report: HB 869 became Acts Ch. 198 on April 27 and directs the Cabinet for Economic Development to report on tax credits and incentives for hyperscale data centers and data centers in Kentucky and surrounding states by August 1, 2027. Kentucky LRC HB 869 record, 2026-04-27
  • 2025-2026 - PSC tariff activity: EKPC’s Rate DCP was approved in October 2025 and LG&E/KU’s Rate EHLF in February 2026. Big Rivers’ proposed retail electric service agreement for TeraWulf/Justified DataPower remained pending in Case No. 2026-00115: on July 10 the PSC required any hearing or record-submission request by July 28, and on July 14 moved the July 27 public-comment meeting to Hancock County High School. No final approval had issued by July 17. Kentucky PSC Case No. 2025-00140 order, 2025-10-30 Kentucky PSC Case No. 2025-00113 order, 2026-02-16 Kentucky PSC Case No. 2026-00115 docket, 2026-07-14

5) Notable projects (announced / under construction / pending)

  • PowerHouse Data Centers + Poe Companies (Louisville / Jefferson County): The first Kentucky hyperscale project remains the PowerHouse/Poe Louisville campus; LG&E announced service for an initial 335 MW with expansion to 402 MW, and Phase I of roughly 130 MW was targeted for late 2026. LG&E, 2025-01-16 Kentucky EPIC/University of Kentucky CAER, 2026-06-04
  • TeraWulf Hawesville / Justified DataPower (Hancock County): TeraWulf acquired the former Hawesville aluminum site in February. On July 6 its Raylan Data subsidiary signed a 20-year lease with Anthropic for approximately 401 MW of critical IT load, with phased delivery from the second half of 2027 through early 2028. That executed tenant lease is a major status change, but utility service still required PSC approval in Case No. 2026-00115. The earlier PSC handout described a 482 MW gross service request, $3.5-$4.0 billion of TeraWulf capital before tenant/server investment, 800-1,000 construction jobs, and 80-100 permanent jobs. TeraWulf SEC Form 8-K, 2026-07-06 Kentucky PSC informal-conference handout, 2026-06-02 Kentucky PSC Case No. 2026-00115 docket, 2026-07-14
  • TeraWulf Muskie Data Campus (EastPark Industrial Park, eastern Kentucky): TeraWulf acquired the Muskie Data Campus on May 26, 2026; the project is expected to support more than 1 GW, with an initial 500 MW ramp beginning in the second half of 2028 and another 500 MW targeted for the second half of 2030, supported by a Kentucky Power 345 kV substation tied to the 765 kV network. TeraWulf, 2026-05-26
  • Mason County / Maysville project (developer undisclosed publicly): Mason County approved a rezoning path for a proposed data-center campus covering about 2,080 acres; the public project page lists the rezoning, development-plan records, public hearings, and community submissions, but does not publish a final MW figure or capital-investment amount on the landing page. City of Maysville/Mason County, 2026-05-27
  • Franklin/Simpson County - TenKey / OTN-related proposal: Franklin’s Planning and Zoning Commission approved a preliminary development plan for three 200,000-square-foot data-storage facilities with on-site power manufacturing; litigation filed in April challenges whether the approval should have required additional zoning review. WKYU, 2026-03-04 WBKO, 2026-04-06
  • Pikeville / MD Squared Power (preliminary MOU): Pikeville signed an April 20, 2026 MOU with MD Squared Power for a 120-day exclusive review of a potential data center at the Kentucky Enterprise Industrial Park; the city described an initial phase exceeding $250 million, about 25-30 MW of computing capacity, more than 190 construction jobs, and 40 permanent full-time positions, but no final development agreement had been approved as of the June 5 release. City of Pikeville, 2026-06-05 City of Pikeville review details, 2026-06-05
  • DartPoints / former Lexmark campus (Lexington): DartPoints acquired the existing Lexington campus for $29 million in May, initially describing 20-30 MW with expansion potential to roughly 70 MW. Records reported in July described a longer-term investment objective of about $1.05 billion, but DartPoints had not obtained an operating/expansion permit before Lexington’s June 9 moratorium, so the expansion was not approved by this cutoff. DartPoints, 2026-05-27 WEKU, 2026-06-04 AOL/Lexington Herald-Leader, 2026-07-10
  • Cave Point Commerce Center (Cave City/Barren County): The developer’s June planning-grade analysis described a proposed 600-acre, ten-building campus totaling about 2 million square feet and 1,200 MW at full build-out, with 300 data-center and 60 generation jobs. These are developer projections, and the project remained entangled in litigation over Cave City’s moratorium. WKYT/WBKO, 2026-06-10
  • Riot Platforms (McCracken County): Riot operates a 60 MW Bitcoin-mining data center in McCracken County. A May partnership announcement raised the possibility of a future small modular reactor supplying the site, but it was an exploratory pathway rather than an approved generation project. WKMS, 2026-05-06
  • Letcher County Gateway concept: By July 16, Diversified Energy and Maverick Holdings were evaluating an approximately 100 MW off-grid natural-gas generation project at Gateway Industrial Park to attract a future data center or other industry. No data-center tenant or committed capital project had been announced, so this remains a site/power concept rather than a data-center project. WSIP FM, 2026-07-16
  • Oldham County “Project Lincoln” (withdrawn): Western Hospitality Partners’ proposed 600 MW, roughly $6 billion campus was withdrawn in 2025 after local pushback and the Oldham moratorium; it remains a historical example, not an active project in the current review window. Data Center Dynamics, 2025-05-08 WLKY, 2025-07-03
  • Meade County proposal (rezoning rejected): A proposed 138-acre data-center rezoning was rejected in 2025, and Meade County subsequently adopted a 12-month moratorium. Data Center Dynamics, 2025-10-20 Meade County second-reading notice, 2026-01-13

Notes

  • Primary sources are prioritized where available: statutes, enacted bills, county/city pages, PSC orders/dockets, Cabinet guidance, and company filings. Local reporting is used for community opposition, lawsuits, and local meeting outcomes where primary records were incomplete or not easily extractable.