In the final hours of this year’s legislative session, Republicans sent more legislation to the governor but failed to pass bills aimed at tackling the state’s housing shortage and protecting ratepayers from bearing the costs of supplying electricity to data centers.
The legislature also restored funding to public universities that it had earlier cut.
Lawmakers ended the 2026 session Wednesday evening without reaching agreement on Senate Bill 9, an omnibus housing bill supported by affordable housing advocates and the state Chamber of Commerce.
A sticking point in negotiations was a controversial provision that would largely block local governments from regulating short-term rentals such as Airbnbs.
Sen. Robby Mills, R-Henderson, SB 9’s sponsor, told the Lantern he was “slightly disappointed” the legislation failed but that lawmakers would continue to talk about housing, including short-term rental regulations, throughout this year.
“I’ve been around here long enough to know that you can’t get personally attached to issues, and sometimes it takes multiple sessions to pass something,” Mills said.
Among SB 9’s provisions were a reduction in required parking minimums for housing developments, incentive programs for residential housing development and expungement of eviction records for individuals whose eviction cases were dismissed. The bill had grown substantially in size in the final days of the session, picking up the provision that would have prevented local governments from regulating the density and number of short-term rentals.
Mills told the Lantern the primary barrier to the bill was the local preemption on short-term rental regulation. A veto of the legislation by Democratic Gov. Andy Beshear would have killed the bill for the year because lawmakers would not have an opportunity to come back and override the veto.
SB 9’s supporters included the advocacy nonprofit Homeless and Housing Coalition of Kentucky and the conservative advocacy group Americans for Prosperity Kentucky.
Heather LeMire, Americans for Prosperity Kentucky director, in a statement said the Kentucky Senate had “chosen politics over the people and passivity over good policy.”
“The people of Kentucky deserve a better shot at the American Dream through homeownership. As lawmakers return to their districts without making meaningful progress, hardworking families will continue to endure a severe housing shortage and affordability crisis,” LeMire said.
Mills pointed to other bills the legislature has passed,, including one sponsored by Sen. Keturah Herron, D-Louisville, that clears barriers to develop environmentally remediated land, as evidence that the legislature took some action on housing issues.
“I don’t think we totally whiffed,” Mills said. “I think you’ll continue to hear people talking about affordability and housing over the interim.”
Data center measure fails on final day
Another proposal that didn’t make it to the governor’s desk was sponsored by Rep. Josh Bray, R-Mount Vernon, seeking to ensure the costs of infrastructure and service to meet the demands of power-intensive data centers would not be borne by other ratepayers. Bray’s House Bill 593 cleared the House in March but stalled in the Senate.
The bill would have required utilities to issue regulations for prospective data center customers and ensure that a contract between a data center and a utility prevents “the subsidization of data center customers by non-data center customers through rates or by any other means.”
Investor-owned utility Louisville Gas and Electric and Kentucky Utilities (LG&E and KU) and nonprofit utility East Kentucky Power Cooperative (EKPC) have received approval from the Kentucky Public Service Commission for rules and rates for data centers with high power demands.
Bray’s proposals were added to Senate Bill 197 in late March in a legislative committee meeting but then stripped from the bill by a committee on Wednesday. SB 197 passed through the legislature Wednesday evening without the data center proposals.
Bray told reporters that “the Senate in general” was the reason his proposals didn’t pass, mentioning that LG&E and KU “didn’t like it” either.
Kentucky Senate President Robert Stivers, R-Manchester, told reporters Wednesday evening, citing the work the Kentucky Public Service Commission had already done to approve data center tariffs for EKPC and LG&E and KU, that data center regulations are set up differently because nonprofit utilities and for-profit utilities “have different mechanisms for which they operate and fund themselves.”
“I talked to Josh Bray. I understand what he was doing,” Stivers said. “It’s a coming issue, and so we need to make sure we do it the correct way.”
He said Kentucky Public Service Commission Chair Angie Hatton and “the people of the PSC have done a good job” with data center regulations so far.