Session of 2025
HOUSE BILL No. 2083
By Committee on Taxation
Requested by Kimberly Gencur on behalf of the Advanced Power Alliance
1-23
AN ACT concerning property taxation; relating to exemptions; providing a
property tax exemption for new energy storage systems; excluding new
energy storage systems from the commercial and industrial machinery
and equipment exemption; amending K.S.A. 79-223 and K.S.A. 2024
Supp. 79-266 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 79-223 is hereby amended to read as follows: 79-
223. (a) It is the purpose of this section to promote, stimulate, foster and
encourage new investments in commercial and industrial machinery and
equipment in the state of Kansas, to contribute to the economic recovery of
the state, to enhance business opportunities in the state, to encourage the
location of new businesses and industries in the state as well as the
retention and expansion of existing businesses and industries and to
promote the economic stability of the state by maintaining and providing
employment opportunities, thereby contributing to the general welfare of
the citizens of the state, by exempting from property taxation all newly
purchased or leased commercial and industrial machinery and equipment,
including machinery and equipment transferred into this state for the
purpose of expanding an existing business or for the creation of a new
business.
(b) The following described property, to the extent specified by this
section, shall be and is hereby exempt from all property or ad valorem
taxes levied under the laws of the state of Kansas:
First. Commercial and industrial machinery and equipment acquired by
qualified purchase or lease made or entered into after June 30, 2006, as the
result of a bona fide transaction not consummated for the purpose of
avoiding taxation.
Second. Commercial and industrial machinery and equipment
transported into this state after June 30, 2006, for the purpose of expanding
an existing business or creation of a new business.
(c) Any purchase, lease or transportation of commercial and industrial
machinery and equipment consummated for the purpose of avoiding
taxation shall subject the property to the penalty provisions of K.S.A. 79-
1422 and 79-1427a, and amendments thereto. The county appraiser shall
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not reclassify any property that is properly classified for property tax
purposes within subclass (5) of class 2 of section 1 of article 11 of the
constitution of the state of Kansas.
(d) As used in this section:
(1) "Acquired" shall not include the transfer of property pursuant to
an exchange for stock securities, or the transfer of assets from one going
concern to another due to a merger, reorganization or other consolidation;
(2) "commercial and industrial machinery and equipment" means
property classified for property tax purposes within subclass (5) of class 2
of section 1 of article 11 of the constitution of the state of Kansas, but shall
not include:
(A) Any electric generation facility or addition to an electric
generation facility that is used predominately to produce and generate
electricity utilizing renewable energy resources or technologies as defined
in K.S.A. 79-201, and amendments thereto; or
(B) on and after January 1, 2026, any new energy storage system as
defined in K.S.A. 2024 Supp. 79-266, and amendments thereto. This
exclusion shall not apply to an energy storage system that received any
necessary county approval prior to January 1, 2026;
(3) "qualified lease" means a lease of commercial and industrial
machinery and equipment for not less than 30 days for fair and valuable
consideration where such machinery and equipment is physically
transferred to the lessee to be used in the lessee's business or trade; and
(4) "qualified purchase" means a purchase of commercial and
industrial machinery and equipment for fair and valuable consideration
where such machinery and equipment is physically transferred to the
purchaser to be used in the purchaser's business or trade.
(e) The secretary of revenue is hereby authorized to adopt rules and
regulations to administer the provisions of this section.
Sec. 2. K.S.A. 2024 Supp. 79-266 is hereby amended to read as
follows: 79-266. (a) The following described property, to the extent herein
specified, shall be exempt from all property or ad valorem taxes levied
under the laws of the state of Kansas:
(1) Any new electric generation facility.
(2) Any new addition to a new or existing electric generation facility.
(3) Any new pollution control device constructed or installed on or
after January 1, 2025, at a new or existing electric generation facility.
(4) On and after January 1, 2026, any new energy storage system.
(b) The provisions of this section shall apply from and after
commencement of construction or installation of such property and for the
10 taxable years immediately following the taxable year in which
construction or installation of such property is completed.
(c) As used in this section:
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(1) "Existing electric generation facility" means an electric generation
facility described in K.S.A. 66-104(e) or 66-128(b)(2)(C), and
amendments thereto, that is in existence on December 31, 2024. "Existing
electric generation facility" does not include an electric generation facility
that converts wind, solar, biomass, landfill gas or any other renewable
source of energy to electricity.
(2) "New addition" means any real or tangible personal property
constructed or installed on or after January 1, 2025, for incorporation in
and use as part of a new or existing electric generation facility.
(3) "New electric generation facility" means an electric generation
facility described in K.S.A. 66-104(e) or 66-128(b)(2)(C), and
amendments thereto, and the commencement of construction of such
facility began on or after January 1, 2025. "New electric generation
facility" includes any electric generation facility that utilizes nuclear
energy for the generation of electricity. "New electric generation facility"
does not include any electric generation facility that converts wind, solar,
biomass, landfill gas or any other renewable source of energy to electricity.
(4) "Energy storage system" or "ESS" means commercial or utility-
scale electrochemical, mechanical, electrostatic or gravitational devices
that charge or collect energy from the electrical grid or a generation
facility, store or use that energy and then discharge stored energy at a
later time to provide electricity or other electrical grid services. For
purposes of this paragraph, a generation facility includes any existing or
new electric generation facilities or any electric generation facility that
utilizes renewable energy resources or technologies including wind, solar,
biomass, landfill gas or any other renewable source of energy.
(5) "New energy storage system" means an energy storage system
that the commencement of construction or installation of such property
began on or after January 1, 2026, but does not include an energy storage
system that received any necessary county approval prior to January 1,
2026.
(d) Except as otherwise specifically provided, the provisions of this
section shall apply to all taxable years commencing after December 31,
2024.
Sec. 3. K.S.A. 79-223 and K.S.A. 2024 Supp. 79-266 are hereby
repealed.
Sec. 4. This act shall take effect and be in force from and after its
publication in the statute book.
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