Kansas House Bill HB2083

Kansas 2025-2026 Regular Session

• Introduced: 1/23/25
• Refer: 1/23/25
• Report Pass: 2/13/25
• Engrossed: 2/18/25
• Refer: 2/20/25

Caption

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.

Summary

HB 2083 creates a new property tax exemption for “new energy storage systems” in Kansas and ties that exemption to the state’s existing electric generation property tax framework. Under the bill, energy storage systems that begin construction or installation on or after January 1, 2026, would be exempt from ad valorem taxation for 10 taxable years after completion, with a carveout for projects that already received necessary county approval before that date. The bill defines energy storage systems broadly to include commercial or utility-scale electrochemical, mechanical, electrostatic, or gravitational systems that store energy from the grid or a generation facility and later discharge it to provide electricity or grid services. The bill also amends the commercial and industrial machinery and equipment exemption in K.S.A. 79-223 so that, beginning January 1, 2026, new energy storage systems are excluded from that exemption. In effect, the legislation shifts energy storage projects into a separate tax treatment rather than allowing them to be treated as ordinary commercial and industrial machinery and equipment. It also preserves the existing exclusion from that machinery-and-equipment exemption for renewable-energy electric generation facilities. More broadly, HB 2083 updates Kansas property tax law by amending K.S.A. 79-223 and K.S.A. 2024 Supp. 79-266 and repealing the prior versions of those sections. The bill would affect county appraisers, the Department of Revenue, energy developers, utilities, and owners of battery storage or other grid-scale storage projects. It is designed to encourage investment in energy storage while clarifying how those assets are classified for property tax purposes. The general sentiment reflected in the bill’s progress appears favorable, as it passed the House on final action by a wide margin, 90-29. The committee origin from the House Committee on Taxation and the request by the Advanced Power Alliance suggest support from the energy industry and tax-policy proponents who want a clearer incentive structure for storage projects. The vote margin indicates substantial support, though not unanimity. The main point of contention is likely the tax preference itself: supporters would view the exemption as a way to promote grid reliability and investment in emerging energy infrastructure, while opponents may see it as a property tax break that reduces local tax base or gives special treatment to a particular industry. The bill’s cutoff date and county-approval grandfathering language also suggest concern about fairness between projects already in development and those starting later, as well as about how quickly the new exemption should take effect.

Impact

HB 2083 would amend Kansas property tax statutes to create a new 10-year property tax exemption for qualifying new energy storage systems and to remove those systems from the general commercial and industrial machinery and equipment exemption beginning January 1, 2026. It would change how energy storage assets are classified for ad valorem tax purposes, affect county assessment practices, and provide a specific tax incentive for grid-scale storage projects while leaving other existing exemptions and exclusions in place.

Sentiment

The bill appears to have received generally positive treatment in the House, passing final action 90-29. That vote suggests broad support for the policy direction, likely driven by interest in encouraging energy storage investment and clarifying tax treatment. The absence of recorded committee transcript debate limits insight into detailed arguments, but the final vote indicates the measure was not especially controversial among supporters.

Contention

The likely contention centers on whether energy storage systems should receive a targeted property tax exemption and whether that incentive is justified by the economic and grid benefits. Supporters, including the Advanced Power Alliance and likely energy-sector advocates, would favor the exemption as a development tool. Opponents or skeptics may worry about reduced local property tax revenue, preferential treatment for a specific industry, and the fairness of excluding these systems from the broader machinery-and-equipment exemption. The grandfathering for projects with county approval before January 1, 2026, also suggests a potential concern about protecting projects already underway.