SB3974 103RD GENERAL ASSEMBLY

LRB103 42821 HLH 76071 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3974

Introduced 10/11/2024, by Sen. David Koehler

SYNOPSIS AS INTRODUCED:

35 ILCS 200/Art. 10 Div. 22 heading new
35 ILCS 200/10-920 new
35 ILCS 200/10-925 new
35 ILCS 200/10-935 new
35 ILCS 200/10-940 new
35 ILCS 200/10-945 new
35 ILCS 200/10-950 new
35 ILCS 200/10-955 new
35 ILCS 200/10-960 new

Amends the Property Tax Code. Provides that the fair cash value of commercial energy storage system improvements in counties with fewer than 3,000,000 inhabitants shall be determined by subtracting the allowance for physical depreciation from the commercial energy storage system trended real property cost basis. Provides that those commercial energy storage systems are not subject to equalization factors applied by the Department of Revenue or by any board of review, assessor, or chief county assessment officer. Provides that the owner of the commercial energy storage system shall commission a metes and bounds survey description of the land upon which the commercial energy storage system is located. Contains other provisions concerning the assessment of commercial energy storage systems. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Property Tax Code is amended by adding Division 22 to Article 10 as follows:

(35 ILCS 200/Art. 10 Div. 22 heading new)

Division 22. Commercial energy storage systems

(35 ILCS 200/10-920 new)

Sec. 10-920. Definitions. As used in this Division:

"Allowance for physical depreciation" means the product of: (1) the quotient generated by dividing the actual age in years of the commercial energy storage system on the assessment date by 25 years; multiplied by (2) the commercial energy storage system's trended real property cost basis. The allowance for physical depreciation may not exceed an amount that reduces the value of the commercial energy storage system to 30% of its trended real property cost basis or less.

"Commercial energy storage system" means any device or assembly of devices that (i) is either installed as a stand-alone system or tied to a power generation system, (ii) is used for the primary purpose of storing of energy for wholesale or retail sale and not primarily for storage to later consume on the property on which the device resides, and (iii) is an energy storage system as defined in Section 16-135 of the Public Utilities Act.

"Commercial energy storage system real property cost basis" means the owner of the commercial energy storage system's interest in the land within the project boundaries and real property improvements and shall be calculated at $496 per kilowatt hour (kWh) of rated kilowatt hour (kWh) energy capacity.

"Consumer Price Index" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100.

"Rated kWh energy capacity" means the maximum amount of stored energy in kilowatt hours.

"Trended real property cost basis" means the commercial energy storage system real property cost basis multiplied by the trending factor.

"Trending factor" means the number generated by dividing the Consumer Price Index published by the Bureau of Labor Statistics in the December immediately preceding the assessment date by the Consumer Price Index published by the Bureau of Labor Statistics in December of 2023.

(35 ILCS 200/10-925 new)

Sec. 10-925. Improvement valuation of commercial energy storage systems in counties with fewer than 3,000,000 inhabitants. Beginning in assessment year 2024, the fair cash value of commercial energy storage system improvements in counties with fewer than 3,000,000 inhabitants shall be determined by subtracting the allowance for physical depreciation from the commercial energy storage system trended real property cost basis. Functional obsolescence and external obsolescence of the commercial energy storage system improvements may further reduce the fair cash value of the commercial energy storage system improvements to the extent they are proven by the taxpayer by clear and convincing evidence. The chief county assessment officer may make reasonable adjustments to the actual age of the commercial energy storage system to account for the routine replacement or upgrade of system components.

(35 ILCS 200/10-935 new)

Sec. 10-935. Commercial energy storage systems not subject to equalization. Commercial energy storage systems that are subject to assessment under this Division are not subject to equalization factors applied by the Department or by any board of review, assessor, or chief county assessment officer.

(35 ILCS 200/10-940 new)

Sec. 10-940. Survey for commercial energy storage systems; parcel identification numbers for property improved with a commercial energy storage system. Notwithstanding any other provision of law, the owner of the commercial energy storage system shall commission a metes and bounds survey description of the land upon which the commercial energy storage system is located, including access routes, over which the owner of the commercial energy storage system has exclusive control. Land held for future development shall not be included in the project area for real property assessment purposes. The owner of the commercial energy storage system shall, at the owner's own expense, use an Illinois-registered land surveyor to prepare the survey. The owner of the commercial energy storage system shall deliver a copy of the survey to the chief county assessment officer and to the owner of the land upon which the commercial energy storage system is located. Upon receiving a copy of the survey and an agreed acknowledgment to the separate parcel identification number by the owner of the land upon which the commercial energy storage system is constructed, the chief county assessment officer shall issue a separate parcel identification for the real property improvements, including the land containing the commercial energy storage system, to be used only for the purposes of property assessment for taxation. If no survey is provided, the chief county assessment officer shall determine the area of the site that is occupied by the commercial energy storage system. That determination shall be final and may not be challenged on review. The property records shall contain the legal description of the commercial energy storage system parcel and describe any leasehold interest or other interest of the owner of the commercial energy storage system in the property. A plat prepared under this Section shall not be construed as a violation of the Plat Act.

Surveys that are prepared in accordance with either Section 10-740 or Section 10-620 and that also include the location of a commercial energy storage system in their metes and bounds description shall satisfy the requirements of this Section.

(35 ILCS 200/10-945 new)

Sec. 10-945. Real estate taxes. Notwithstanding the provisions of Section 9-175 of this Code, the owner of the commercial energy storage system shall be liable for the real estate taxes for the land and real property improvements of the commercial energy storage system. Notwithstanding the foregoing, the owner of the land upon which a commercial energy storage system is located may pay any unpaid tax of the commercial energy storage system parcel prior to the initiation of any tax sale proceedings.

(35 ILCS 200/10-950 new)

Sec. 10-950. Property assessed as farmland. Notwithstanding any other provision of law, real property assessed as farmland in accordance with Section 10-110 in the assessment year prior to valuation under this Division shall return to being assessed as farmland in accordance with Section 10-110 in the year following completion of the removal of the commercial energy storage system as long as the property is returned to a farm use as defined in Section 1-60, notwithstanding that the land was not used for farming for the 2 preceding years.

(35 ILCS 200/10-955 new)

Sec. 10-955. Abatements. Any taxing district may, upon a majority vote of its governing authority and after the determination of the assessed valuation as set forth in this Code, order the clerk of the appropriate municipality or county to abate any portion of real property taxes otherwise levied or extended by the taxing district on a commercial energy storage system.

(35 ILCS 200/10-960 new)

Sec. 10-960. Applicability. The provisions of this Division apply for assessment years 2024 through 2040.

Section 99. Effective date. This Act takes effect upon becoming law.