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HB 2083

Providing a property tax exemption for new energy storage systems and excluding new energy storage systems from the commercial and industrial machinery and equipment exemption.

2025-2026 Regular Session

Creates a 10-year property tax exemption for new energy storage systems commencing construction after Jan 1, 2025, removing them from the indefinite machinery & equipment exemption.

Died in Senate Committee
#taxation #utilities
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Bill Summary · HB 2083

HB 2083 — Property tax exemption for new energy storage systems (Kansas)

Purpose

HB 2083 creates a targeted property tax exemption for newly constructed, commercial- or utility-scale energy storage systems (ESS). The bill clarifies the tax status of ESS and removes them from the state's indefinite commercial & industrial machinery and equipment exemption, while granting a time-limited (10‑year) exemption under the electric generation/exemption statute.

Key provisions

  • Adds a new exemption for "new energy storage systems" that commence construction or installation on or after January 1, 2025 (as amended by the House Committee).
  • The ESS exemption begins at commencement of construction/installation and applies for 10 taxable years following the taxable year in which construction/installation is completed.
  • Explicitly excludes new energy storage systems from the commercial and industrial machinery and equipment exemption (which otherwise is available indefinitely).
  • Carve-out: an energy storage system that received necessary county approval prior to the effective cutoff date (Jan. 1, 2025 in the committee amendment; introduced version used Jan. 1, 2026) is not subject to the new exclusion.
  • Definitions: “Energy storage system” / “ESS” is defined as commercial/utility-scale electrochemical, mechanical, electrostatic, or gravitational devices that charge or collect energy from the electrical grid or a generation facility, store it, and later discharge it to provide electricity or grid services. Generation facility includes facilities that use renewable resources (wind, solar, biomass, landfill gas, etc.) and other generation.

Scope and timeline

  • Exemption effective for systems commencing construction/installation on or after Jan. 1, 2025 (per House Committee amendment).
  • Applies for 10 taxable years starting with the tax year after construction/installation completion.
  • County-approval pre-existing projects are excluded from the new start-date rule.

Fiscal impact

  • Division of the Budget fiscal note: no ESS currently operating in Kansas; if new ESS are built, the bill could reduce local property tax revenues by unknown amounts. Potential impacts include lower receipts to:
    • Local governments and counties that levy property tax;
    • School districts (through the state’s uniform mill levy);
    • State building funds (Educational Building Fund and State Institutions Building Fund).
  • Department of Revenue: no operational fiscal effect expected.
  • Board of Tax Appeals: possible slight increase in exemption filings; costs judged negligible.
  • A revised fiscal note reflecting the committee amendment (start date changed to 2025 and 10‑year term) was not immediately available.

Who is affected

  • Developers, owners and operators of commercial/utility‑scale energy storage systems (battery and other large-scale storage projects).
  • Local governments, school districts, and state funds that receive property tax revenues.
  • County appraisal and tax administration processes (filings/exemption reviews), though additional administrative burden is expected to be minimal.

Legislative status & background

  • Introduced Jan. 24, 2025 by the House Committee on Taxation at the request of the Advanced Power Alliance. Primary sponsor listed later as Rep. Martin McLaughlin; multiple House cosponsors added.
  • House Committee amended the bill to set the effective commencement date to Jan. 1, 2025 and to specify the 10‑year exemption term.
  • Proponent testimony came from Advanced Power Alliance and industry representatives; written-only proponent and opponent testimony filed by Kansas Association of Counties and Kansas Policy Institute respectively.
  • Hearing: Tuesday, March 11, 2025, 9:30 AM Room 548‑S. The bill passed the House (as amended) and was transmitted to the Senate for further consideration.

Note: the legislative packet includes unrelated text from other states’ HB 2083 bills; this summary addresses the Kansas HB 2083 (property tax exemption for energy storage systems).

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

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