WHEELER’S RURAL ECONOMIC DEVELOPMENT BILL ADVANCES FROM SENATE COMMITTEE
SB 197 strengthens tools to attract jobs to heritage communities across Kentucky
FRANKFORT, KY. (Feb. 26, 2026) —Senate Bill (SB) 197, sponsored by Sen. Phillip Wheeler, R-Pikeville, passed the Senate Economic Development, Tourism, and Labor Committee today with bipartisan support.
The measure creates a four-tier economic incentive structure designed to direct additional tools and flexibility to counties experiencing population loss and higher unemployment. The goal is to promote more balanced economic growth across Kentucky.
“Kentucky has seen record private-sector investment in recent years, but that growth has not been evenly distributed,” Wheeler said. “SB 197 gives our Cabinet for Economic Development the tools it needs to better compete for projects in rural communities and heritage counties that have faced long-term population and job loss.”
The outline of SB 197 emerged over the interim committee meetings and discussions between Wheeler, Senator Scott Madon, R-Floyd, and members of Eastern Kentucky’s House Delegation including Representatives John Blanton, R-Salyersville , Bobby McCool, R-Paintsville, Mitch Whitaker, R-Whitesburg, Scott Sharp, R-Ashland, and Aaron Thompson, R-Greenup. The legislators heard testimony in committee over the summer from OneEastKY Executive Director Colby Kirk and OneEast Board Chair Tyler Burkeand met on multiple occasions to work out the details of the SB 197, which is based on proven economic development initiatives tried in other states. Secretary Jeff Noel of the Kentucky Cabinet for Economic and his team provided additional suggestions following the roll-out of the bill to make the legislation even more robust for rural Kentucky.
Under the legislation, counties would be ranked using a formula that combines five-year average unemployment data and population metrics. Based on those rankings, counties would fall into one of four tiers. Tier three and tier four counties would qualify as “heritage communities,” and receive enhanced incentive opportunities.
The bill restores the Kentucky Business Investment program’s wage assessment rate to maintain competitiveness and expands eligible industries beyond manufacturing to include research and development, corporate headquarters and other high-skill sectors. It also increases incentive caps and workforce training flexibility in qualifying communities.
Wheeler noted that eastern Kentucky alone has experienced significant population decline over the past several decades.
“If we do not take deliberate action, projections show that some of our largest counties could lose nearly half their population by mid-century,” Wheeler said. “This legislation is about giving rural Kentucky a fair shot. It is not a silver bullet, but it provides practical tools to attract investment and create opportunity.”
Secretary Jeff Noel of the Kentucky Cabinet for Economic Development testified in support of the measure, calling it a broader and more competitive economic development toolkit.
“When your toolbox is missing tools, it is difficult to fix anything,” Noel told the committee. “This legislation helps ensure we have the right tools to support communities across the commonwealth.”
SB 197 now advances for consideration by the full Senate.
Learn more about bills, committees, and other important updates on the 2026 Regular Session at www.legislature.ky.gov.