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SB 1526

PROP TX-ENERGY STORAGE

104th Regular Session Introduced by Dave Koehler

Creates a new Illinois property tax framework for commercial energy storage systems, using $124 per rated kWh cost basis, CPI-trended value, depreciation cap, and no equalization.

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Bill Summary · SB 1526

SB 1526 — "PROP TX — Energy Storage" (summary)

Note: The posted document bundle contains several unrelated drafts with the same bill number. This summary covers the Property Tax / Commercial Energy Storage provisions (Division 22 added to Article 10 of the Illinois Property Tax Code) that appear under the heading "Commercial energy storage systems" (SB 1526, LRB104 05726 HLH 15756 b).

Main purpose

Establish a dedicated property-tax valuation and assessment framework for commercial energy storage systems in Illinois (beginning assessment year 2025). The bill defines how to compute fair cash value for storage-system improvements, prescribes depreciation/trending rules, requires project-level surveys and separate parcel identification, and excludes those systems from equalization adjustments.

Key provisions and mechanics

  • Adds a new Division 22 to Article 10 of the Property Tax Code for "Commercial energy storage systems."
  • Commercial energy storage system real property cost basis: set at $124 per rated kilowatt-hour (kWh) of energy capacity (i.e., $124 × rated kWh).
  • Trending: the "trended real property cost basis" = cost basis × trending factor, where trending factor = (CPI at assessment date) / (CPI, Dec. 2024).
  • Physical depreciation formula: allowance = (actual age in years ÷ 15 years) × trended real property cost basis. The allowance cannot reduce the system value below 30% of the trended cost basis (i.e., physical depreciation capped so residual value ≥ 30%).
  • Total depreciation limits: combined physical, functional, and economic (external) obsolescence may further reduce value but the aggregate depreciation from all forms cannot exceed 70% of the trended real property cost basis (i.e., value cannot fall below 30%).
  • Geographic scope: valuation rules apply in counties with fewer than 3,000,000 inhabitants (i.e., most Illinois counties; large counties above that threshold are excluded).
  • Equalization exclusion: systems assessed under this Division are not subject to equalization factors applied by the Department of Revenue or by boards of review, assessors, or chief county assessment officers.
  • Survey / parceling requirements:
    • System owner must commission and pay for a metes-and-bounds survey describing the land within project boundaries and access routes that the owner exclusively controls.
    • Land held for future development is excluded from the project area for assessment.
    • Owner must deliver the survey to the chief county assessment officer and the landowner.
    • Upon receipt, the chief county assessment officer issues a separate parcel identification number for the land/improvements comprising the system (used solely for property assessment).
    • If no survey is provided, the chief county assessment officer will determine the occupied area; that determination is final and not subject to review by the system owner.
  • Tax liability / payment: bill text indicates the commercial energy storage system owner will be liable for real estate taxes on the land and improvements; full details on how liability interacts with landowner payment rights were truncated in the excerpt — consult the complete bill for final text.

Definitions (selected)

  • "Commercial energy storage system": a standalone or grid‑tied device/assembly whose primary purpose is storing energy for wholesale or retail sale (not primarily for on‑site consumption); aligned with the Public Utilities Act definition (sec. 16‑135).
  • "Rated kWh energy capacity": maximum stored energy measured in kWh.
  • "Consumer Price Index": U.S. BLS CPI-U (United States city average, all items, 1982–84=100).

Who is affected

  • Owners/developers/operators of commercial energy storage projects sited in Illinois counties with populations under 3,000,000.
  • County assessors and chief county assessment officers (administration, parceling, valuation).
  • Landowners hosting storage facilities (lease and tax responsibilities).
  • Local taxing districts (property-tax base and assessment processes).
  • Illinois Department of Revenue (equalization roles limited for these systems).

Timing and procedural points

  • Bill synopsis indicates applicability beginning assessment year 2025; the bill’s synopsis also lists "effective immediately."
  • Owners must commission surveys and submit them to county assessors as part of the assessment process.
  • Because some text in the provided excerpt is truncated, parties should consult the enrolled or final bill text for precise obligations and the complete tax‑liability language.

Potential impacts / considerations

  • Provides a standardized, cost‑basis valuation methodology (per‑kWh basis and CPI trending) that may lower or stabilize assessed values compared with other ad hoc approaches, depending on age and obsolescence adjustments.
  • The carve‑out from equalization reduces the Department of Revenue’s ability to apply broad equalization multipliers to these assets, potentially reducing variability across counties.
  • Imposes administrative duties on system owners (surveys) and on county assessment offices (issuing separate parcel IDs, making determinations if no survey).
  • Could shift tax incidence between system owners and landowners depending on final tax-liability provisions.

For complete implementation details, statutory cross-references, and any final amendments or effective‑date language, consult the final enrolled bill text and county assessment guidance once the bill is enacted.

Compiled from official sources — confirm details with the bill’s official record.

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