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PAG LIN 1 1 Section 1. Section 427B.17, subsection 5, unnumbered 1 2 paragraph 2, Code 1997, is amended to read as follows: 1 3 Any electric power generating plant which operated during 1 4 the preceding assessment year at a net capacity factor of more 1 5 than twenty percent, within the service area existing of a 1 6 municipal or an electric cooperative, as those terms are 1 7 defined in section 437A.1, shall not receive the benefits of 1 8 this section or of sections 15.332 and 15.334. For purposes 1 9 of this section, "electric power generating plant" means any 1 10 name plate rated electric power generating plant, in which 1 11 electric energy is produced from other forms of energy, 1 12 including all taxable land, buildings, and equipment used in 1 13 the production of such energy. "Net capacity factor" means 1 14 net actual generation divided by the product of net maximum 1 15 capacity times the number of hours the unit was in the active 1 16 state during the assessment year. Upon commissioning, a unit 1 17 is in the active state until it is decommissioned. "Net 1 18 actual generation" means net electrical megawatt hours 1 19 produced by the unit during the preceding assessment year. 1 20 "Net maximum capacity" means the capacity the unit can sustain 1 21 over a specified period when not restricted by ambient 1 22 conditions or equipment deratings, minus the losses associated 1 23 with station service or auxiliary loads. 1 24 Sec. 2. Section 428.37, subsection 1, paragraph b, Code 1 25 1997, is amended to read as follows: 1 26 b. "Electric power generating plant" means each taxable 1 27 name plate rated electric power generating plant owned solely 1 28 or jointly by any person or electric power facility financed 1 29 underthe provisions ofchapter 28F in which electrical energy 1 30 is produced from other forms of energy, including all 1 31 equipment used in the production of such energy through its 1 32 step-up transformer. "Electric power generating plant" does 1 33 not include an electric company as defined in section 437A.1, 1 34 other than a municipal utility or an electric cooperative in 1 35 existence as of January 1, 1997, to the extent that such 2 1 electric company is subject to the replacement tax provisions 2 2 of chapter 437A. 2 3 Sec. 3. Section 437.1, Code 1997, is amended as follows: 2 4 437.1 "COMPANY" DEFINED. 2 5 "Company" as used in this chapter means any person, 2 6 copartnership, association, corporation, or syndicate, except 2 7 cooperative corporations or associations which are not 2 8 organized or operated for profit, that owns or operates a 2 9 transmission line or lines for the conducting of electric 2 10 energy located within the state and wholly or partly outside 2 11 cities, whether formed or organized under the laws of this 2 12 state or elsewhere. "Company" does not include an electric 2 13 company as defined in section 437A.1, other than a municipal 2 14 utility or an electric cooperative in existence as of January 2 15 1, 1997, to the extent that such electric company or natural 2 16 gas company is subject to the replacement tax provisions of 2 17 chapter 437A. 2 18 Sec. 4. NEW SECTION. 437A.1 DEFINITIONS. 2 19 As used in this chapter, unless the context otherwise 2 20 requires: 2 21 1. "Consolidation" means the combination of two or more 2 22 electric companies or natural gas companies in a manner that 2 23 none of the companies involved in the combination separately 2 24 provide to consumers services that are rate-regulated by the 2 25 utilities board after such combination. 2 26 2. "Consumer" means an end-user of electricity or natural 2 27 gas consumed within this state. 2 28 3. "Electric company" means a person engaged primarily in 2 29 the production, delivery, service, or sales of electric energy 2 30 whether formed or organized under the laws of this state or 2 31 elsewhere. "Electric company" includes a combination natural 2 32 gas company and electric company. 2 33 4. "Electric cooperative" means an electric cooperative 2 34 utility provider established pursuant to chapter 498 or 499. 2 35 5. "Municipal" means a municipal electric utility or 3 1 electric facility subject to taxation under section 427.1, 3 2 subsection 2, including a jointly owned or operated municipal 3 3 electric utility and a municipal electric utility financed 3 4 under chapter 28F, and a municipal natural gas facility. 3 5 6. "Natural gas company" means a person that owns, 3 6 operates, or is engaged primarily in operating or utilizing 3 7 pipelines for the purpose of distributing natural gas to 3 8 consumers located within this state, excluding a gas 3 9 distributing plant or company as described in section 438.19. 3 10 "Natural gas company" includes a combination natural gas 3 11 company and electric company. 3 12 7. "Person" means an individual, copartnership, 3 13 association, corporation, or syndicate, including cooperative 3 14 and municipal corporations and associations not organized or 3 15 operated for profit. 3 16 8. "Replacement tax" means the excise tax imposed on the 3 17 generation, delivery, consumption, or use of electricity or 3 18 natural gas under sections 437A.2, 437A.3, or 437A.4. 3 19 9. "Service area" means, for electric service for a 3 20 municipal and an electric cooperative, the electric service 3 21 areas assigned by the utilities board under chapter 476 as of 3 22 January 1, 1997, and for natural gas for a municipal and an 3 23 electric cooperative, the premises receiving natural gas from 3 24 the municipal or the electric cooperative as of January 1, 3 25 1997. 3 26 10. "Taxpayer" means an electric company, natural gas 3 27 company, or other person subject to the replacement tax 3 28 imposed under section 437A.2, 437A.3, or 437A.4. 3 29 11. "Tax year" means a calendar year beginning January 1 3 30 and ending December 31. 3 31 Sec. 5. NEW SECTION. 437A.2 REPLACEMENT TAX IMPOSED ON 3 32 ELECTRIC COMPANIES – EXEMPTIONS. 3 33 1. a. A replacement tax is imposed on an electric company 3 34 as follows: 3 35 (1) Fifteen one-hundredths of a cent per kilowatt-hour on 4 1 the first five billion kilowatt-hours of electricity delivered 4 2 within the state during a tax year. 4 3 (2) Three hundred fifty-five one-thousandths of a cent per 4 4 kilowatt-hour on the excess of five billion kilowatt-hours of 4 5 electricity up to and including fifteen billion kilowatt-hours 4 6 of electricity delivered within the state during a tax year. 4 7 (3) Twenty-five one-hundredths of a cent per kilowatt-hour 4 8 on the excess of fifteen billion kilowatt-hours of electricity 4 9 delivered within the state during a tax year. 4 10 b. Notwithstanding paragraph "a", effective for tax years 4 11 beginning after the effective date of the consolidation of two 4 12 investor-owned electric companies which are rate-regulated by 4 13 the utilities board as of January 1, 1997, the replacement tax 4 14 imposed is as follows: 4 15 (1) Two hundred thirty-five one-thousandths of a cent per 4 16 kilowatt-hour on the first fifteen billion kilowatt-hours of 4 17 electricity delivered within this state during a tax year. 4 18 (2) Four hundred fifty-five one-thousandths of a cent per 4 19 kilowatt-hour on the excess of fifteen billion kilowatt-hours 4 20 of electricity up to and including twenty billion kilowatt- 4 21 hours of electricity delivered within this state during a tax 4 22 year. 4 23 (3) Twenty-five one-hundredths of a cent on the excess of 4 24 twenty billion kilowatt-hours of electricity delivered within 4 25 this state during a tax year. 4 26 2. If electricity is consumed in this state, whether such 4 27 electricity is purchased, transferred, or self-generated, and 4 28 the delivery, purchase, transference, or self-generation of 4 29 such electricity is not subject to the replacement tax imposed 4 30 under subsection 1, the consumer is subject to a replacement 4 31 tax imposed at the rates prescribed under subsection 1, unless 4 32 the consumer is located within the service area of a municipal 4 33 or electric cooperative as such municipal or cooperative 4 34 existed on January 1, 1997. 4 35 3. Electricity transferred between two electric companies 5 1 having at least a fifty percent direct or indirect ownership 5 2 interest in each other is not subject to the replacement tax 5 3 under subsection 1 or 2. 5 4 4. A municipal or an electric cooperative existing prior 5 5 to January 1, 1997, is subject to the replacement tax under 5 6 subsections 1 and 2, but only to the extent the municipal or 5 7 electric cooperative delivers electricity outside its service 5 8 area and only on the amount delivered outside the service area 5 9 and within this state. 5 10 5. An electric company or other person is not subject to 5 11 the replacement tax under subsection 1 or 2 for electricity 5 12 used in the production, delivery, service, or sales of 5 13 electricity or natural gas by the electric company or person. 5 14 6. Delivery or consumption of electricity within a service 5 15 area assigned to a municipal or an electric cooperative 5 16 established as of January 1, 1997, is not subject to the 5 17 replacement tax under subsection 1 or 2. 5 18 Sec. 6. NEW SECTION. 437A.3 REPLACEMENT TAX IMPOSED ON 5 19 NATURAL GAS COMPANIES – EXEMPTIONS. 5 20 1. a. A replacement tax is imposed on a natural gas 5 21 company as follows: 5 22 (1) Seventeen ten-thousandths of a cent per therm on the 5 23 first thirty billion therms of natural gas delivered within 5 24 this state during a tax year. 5 25 (2) Two hundred ten-thousandths of a cent per therm on the 5 26 excess of thirty billion therms of natural gas up to and 5 27 including sixty billion therms of natural gas delivered within 5 28 this state during a tax year. 5 29 (3) Ninety ten-thousandths of a cent per therm on the 5 30 excess of sixty billion therms of natural gas delivered within 5 31 this state during a tax year. 5 32 b. Notwithstanding paragraph "a", effective for tax years 5 33 beginning after the effective date of the consolidation of two 5 34 investor-owned natural gas companies which are rate-regulated 5 35 by the utilities board as of January 1, 1997, the replacement 6 1 tax imposed is as follows: 6 2 (1) Sixty-seven ten-thousandths of a cent per therm on the 6 3 first eighty billion therms of natural gas delivered within 6 4 the state during a tax year. 6 5 (2) One hundred eighty ten-thousandths of a cent per therm 6 6 on the excess of eighty billion therms of natural gas up to 6 7 and including one hundred-twenty billion therms of natural gas 6 8 delivered within this state during a tax year. 6 9 (3) Eighty ten-thousandths of a cent per therm on the 6 10 excess of one hundred-twenty billion therms of natural gas 6 11 delivered within this state during a tax year. 6 12 2. If natural gas is consumed in this state, whether such 6 13 natural gas is purchased, transferred, or self-generated, and 6 14 the delivery, purchase, transference, or self-generation of 6 15 such natural gas is not subject to the replacement tax imposed 6 16 under subsection 1, the consumer is subject to a replacement 6 17 tax imposed at the rates prescribed under subsection 1, unless 6 18 the consumer is located within the service area of a municipal 6 19 or electric cooperative as such municipal or cooperative 6 20 existed on January 1, 1997. 6 21 3. Natural gas transferred between two natural gas 6 22 companies having at least a fifty percent direct or indirect 6 23 ownership interest in each other is not subject to the 6 24 replacement tax under subsection 1 or 2. 6 25 4. A municipal existing prior to January 1, 1997, is 6 26 subject to the replacement tax under subsections 1 and 2, but 6 27 only to the extent the municipal delivers natural gas outside 6 28 of its service area and only on the amount delivered outside 6 29 the service area and within this state. 6 30 5. A natural gas company or other person is not subject to 6 31 the replacement tax under subsection 1 or 2 for natural gas 6 32 used in the production, delivery, service, or sales of 6 33 electricity or natural gas by such natural gas company or 6 34 person. 6 35 6. Delivery or consumption of natural gas within a service 7 1 area assigned to a municipal is not subject to replacement tax 7 2 under subsections 1 and 2. 7 3 Sec. 7. NEW SECTION. 437A.4 REPLACEMENT TAX IMPOSED ON 7 4 OTHER ELECTRIC GENERATION. 7 5 Except for a municipal and an electric cooperative existing 7 6 as of January 1, 1997, a person is subject to a replacement 7 7 tax equal to six hundred ten-thousandths of a cent per 7 8 kilowatt-hour of electricity generated by such person in this 7 9 state. 7 10 Sec. 8. NEW SECTION. 437A.5 RETURN AND PAYMENT 7 11 REQUIREMENTS. 7 12 1. Each taxpayer, on or before the 28th day of February 7 13 following a tax year, shall file with the director of revenue 7 14 and finance a return showing the total kilowatt-hours of 7 15 electricity delivered within the state during the tax year, 7 16 and the total therms of natural gas delivered within the state 7 17 during the tax year, as applicable, including, but not limited 7 18 to the following information: 7 19 a. For a municipal or electric cooperative established 7 20 prior to January 1, 1997, the total kilowatt-hours of 7 21 electricity delivered within the state and the total therms of 7 22 natural gas delivered within the state to customers located 7 23 outside of the service area of the municipal or electric 7 24 cooperative. 7 25 b. The total kilowatt-hours of electricity consumed within 7 26 the state during the tax year subject to tax under section 7 27 437A.2, subsection 2, and the total therms of natural gas 7 28 consumed within the state during the tax year subject to tax 7 29 under section 437A.3, subsection 2. 7 30 c. The total kilowatt-hours of electricity generated 7 31 during the tax year subject to tax under section 437A.4. 7 32 2. A return shall be signed by the president, or other 7 33 person duly authorized by the taxpayer, and must be certified 7 34 as correct and in accordance with forms and rules prescribed 7 35 by the director. 8 1 3. At the time of filing the return with the director, the 8 2 taxpayer shall calculate the replacement tax owed for the tax 8 3 year. On or before the 31st day of August immediately 8 4 following the tax year, the taxpayer shall remit to the 8 5 director one-half of the replacement tax shown to be owed on 8 6 the return, and on or before the last day of February, the 8 7 taxpayer shall remit to the director the remaining replacement 8 8 tax shown to be owed on the return. 8 9 Sec. 9. NEW SECTION. 437A.6 FAILURE TO FILE RETURN – 8 10 INCORRECT RETURN. 8 11 1. As soon as practicable after a return is filed, and in 8 12 any event within three years after the return is filed, the 8 13 department shall examine the return, assess and determine the 8 14 tax due if the return is found to be incorrect, and give 8 15 notice to the taxpayer of the assessment and determination as 8 16 provided in subsection 2. The period for the examination and 8 17 determination of the correct amount of tax is unlimited in the 8 18 case of a false or fraudulent return made with the intent to 8 19 evade tax or in the case of a failure to file a return. 8 20 2. If a return required by this section is not filed, or 8 21 if a return when filed is incorrect or insufficient and the 8 22 taxpayer fails to file a corrected or sufficient return within 8 23 twenty days after such return is required by notice from the 8 24 department, the department shall determine the amount of tax 8 25 due from information as the department may be able to obtain 8 26 and, if necessary, may estimate the tax due on the basis of 8 27 external indices. The department shall give notice of the 8 28 determination to the taxpayer liable for the tax. The 8 29 determination shall fix the tax unless the taxpayer against 8 30 whom it is assessed, within sixty days after notice of the 8 31 determination, applies to the director for a hearing or unless 8 32 the taxpayer contests the determination by paying the tax, 8 33 interest, and penalty, and timely filing a claim for refund. 8 34 At a hearing pursuant to this subsection, evidence may be 8 35 offered to support the determination or to prove that it is 9 1 incorrect. After hearing, the director shall give notice of 9 2 the decision to the taxpayer. 9 3 3. The three-year period of limitation provided in 9 4 subsection 1 may be extended by the taxpayer by signing a 9 5 waiver agreement form to be provided by the department. The 9 6 agreement shall stipulate the period of extension and the tax 9 7 period to which the extension applies. The agreement shall 9 8 also provide that a claim for refund may be filed by the 9 9 taxpayer at any time during the period of extension. 9 10 Sec. 10. NEW SECTION. 437A.7 JUDICIAL REVIEW. 9 11 1. Judicial review of the actions of the director may be 9 12 sought pursuant to chapter 17A, the Iowa administrative 9 13 procedure act. 9 14 2. For cause and upon a showing by the director that 9 15 collection of the tax in dispute is in doubt, the court may 9 16 order the petitioner to file with the clerk a bond for the use 9 17 of the respondent, with sureties approved by the clerk, in the 9 18 amount of tax appealed from, conditioned upon the performance 9 19 by the petitioner of any orders of the court. 9 20 3. An appeal may be taken by the taxpayer or the director 9 21 to the supreme court of this state irrespective of the amount 9 22 involved. 9 23 Sec. 11. NEW SECTION. 437A.8 STATUTE APPLICABLE TO 9 24 REPLACEMENT TAX. 9 25 Section 422.26 applies with respect to the replacement tax 9 26 and penalties imposed by this chapter, except that, as applied 9 27 to any tax imposed by this chapter, the lien provided shall be 9 28 prior and superior over all subsequent liens upon any personal 9 29 property within this state, or right to such personal 9 30 property, belonging to the taxpayer, without the necessity of 9 31 recording the lien as provided in section 422.26. The 9 32 requirement for recording, as applied to the tax imposed by 9 33 this chapter, shall apply only to a lien upon real property. 9 34 When requested to do so by any person from whom the taxpayer 9 35 is seeking credit, or with whom the taxpayer is negotiating 10 1 the sale of any personal property, or by any other person 10 2 having a legitimate interest in such information, the 10 3 director, upon determining that such situation exists, shall 10 4 inform such person as to the amount of unpaid replacement 10 5 taxes due by the taxpayer under this chapter. Providing the 10 6 information as permitted under this section is not a violation 10 7 of section 422.72, as applied to this chapter. 10 8 Sec. 12. NEW SECTION. 437A.9 SERVICE OF NOTICE. 10 9 1. A notice authorized or required under this chapter may 10 10 be given by mailing the notice to the taxpayer, addressed to 10 11 the taxpayer at the address given in the last return filed by 10 12 the taxpayer pursuant to this chapter, or if no return has 10 13 been filed, then to the most recent address of the taxpayer 10 14 obtainable. The mailing of the notice is presumptive evidence 10 15 of the receipt of the notice by the taxpayer to whom the 10 16 notice is addressed. A period of time within which some 10 17 action must be taken as provided in this chapter for which 10 18 notice is provided under this section commences to run from 10 19 the date of mailing of the notice. 10 20 2. There is no limitation for the enforcement of a civil 10 21 remedy pursuant to any proceeding or action taken to levy, 10 22 appraise, assess, determine, or enforce the collection of any 10 23 tax or penalty due under this chapter. 10 24 Sec. 13. NEW SECTION. 437A.10 PENALTIES – OFFENSES – 10 25 LIMITATION. 10 26 1. In addition to the replacement tax, a taxpayer is 10 27 subject to the penalties provided in section 421.27. A 10 28 taxpayer shall also pay interest on the delinquent replacement 10 29 tax at the rate in effect under section 421.7 for each month 10 30 computed from the date the payment was due, counting each 10 31 fraction of a month as an entire month. The penalty and 10 32 interest shall be paid to the department and disposed of in 10 33 the same manner as other receipts under this chapter. Unpaid 10 34 penalties and interest may be enforced in the same manner as 10 35 the replacement tax imposed by this chapter. 11 1 2. A taxpayer or officer, member, or employee of the 11 2 taxpayer who willfully attempts to evade the replacement tax 11 3 imposed or the payment of the replacement tax, or is 11 4 associated with a taxpayer who makes or causes to be made a 11 5 false or fraudulent return with intent to evade the 11 6 replacement tax or the payment of the replacement tax, is 11 7 guilty of a class "D" felony. 11 8 3. The issuance of a certificate by the director stating 11 9 that a replacement tax has not been paid, that a return has 11 10 not been filed, or that information has not been supplied 11 11 pursuant to this chapter, is prima facie evidence of such 11 12 failure. 11 13 4. A taxpayer or officer, member, or employee of the 11 14 taxpayer required to pay a replacement tax, or required to 11 15 make, sign, or file an annual return or supplemental return, 11 16 who willfully makes a false or fraudulent annual return, or 11 17 willfully fails to pay at least ninety percent of the 11 18 replacement tax or willfully fails to make, sign, or file the 11 19 annual return, as required, is guilty of a fraudulent 11 20 practice. 11 21 5. For purposes of determining the place of trial, the 11 22 situs of an offense is in the county of the residence of the 11 23 taxpayer charged with the offense, unless the taxpayer is a 11 24 nonresident of this state or the residence of the taxpayer 11 25 cannot be established, in which event the situs of the offense 11 26 is in Polk county. 11 27 6. A prosecution for an offense specified in this section 11 28 shall be commenced within six years after the commission of 11 29 the offense. 11 30 Sec. 14. NEW SECTION. 437A.11 CORRECTION OF ERRORS – 11 31 REFUNDS OR CREDITS OF REPLACEMENT TAX PAID – INFORMATION 11 32 CONFIDENTIAL – PENALTY. 11 33 1. If it appears, as a result of mistake, that an amount 11 34 of replacement tax, penalty, or interest has been paid which 11 35 was not due under this chapter, then the amount shall be 12 1 credited against any replacement tax due, or to become due, on 12 2 the books of the department from the taxpayer who made the 12 3 erroneous payment, or the amount shall be refunded to the 12 4 taxpayer by the department. A claim for refund or credit that 12 5 is not filed with the department within three years after the 12 6 replacement tax payment upon which a refund or credit is 12 7 claimed became due, or one year after the replacement tax 12 8 payment was made, whichever time is later, shall not be 12 9 allowed by the director. 12 10 2. It is unlawful for any present or former officer or 12 11 employee of the state to divulge or to make known in any 12 12 manner to any person the amount or source of income, profits, 12 13 losses, expenditures, or any particular of such income, 12 14 profits, losses, expenditures, set forth or disclosed in a 12 15 return, or to permit a return or copy of a return or any book 12 16 containing any abstract or particulars of a return to be seen 12 17 or examined by any person, except as provided by law. It is 12 18 unlawful for any person to print or publish in any manner a 12 19 return, or any part of a return or source of income, profits, 12 20 losses, or expenditures appearing in a return, except as 12 21 provided by law. A person who violates this section is guilty 12 22 of a serious misdemeanor. If the offender is an officer or 12 23 employee of the state, such person shall also be dismissed 12 24 from office or discharged from employment. This section does 12 25 not prohibit turning over to duly authorized officers of the 12 26 United States of tax officials of other states state 12 27 information and returns pursuant to agreement between the 12 28 director and the secretary of the treasury of the United 12 29 States or the secretary's delegate or pursuant to a reciprocal 12 30 agreement with another state. 12 31 3. Unless otherwise expressly permitted by a section 12 32 referencing this chapter, a tax return, return information, or 12 33 investigative or audit information shall not be divulged to 12 34 any person or entity, other than the taxpayer, the department, 12 35 or internal revenue service for use in a matter unrelated to 13 1 tax administration. 13 2 This prohibition precludes persons or entities other than 13 3 the taxpayer, the department, or the internal revenue service 13 4 from obtaining such information from the department, and a 13 5 subpoena, order, or process which requires the department to 13 6 produce such information to a person or entity, other than the 13 7 taxpayer, the department, or internal revenue service for use 13 8 in a nontax proceeding is void. 13 9 4. The director may disclose taxpayer identity information 13 10 to the press and other media for purposes of notifying 13 11 taxpayers entitled to tax refunds when the director, after 13 12 reasonable effort and lapse of time, has been unable to locate 13 13 such taxpayers. 13 14 Sec. 15. NEW SECTION. 437A.12 ALLOCATION OF REVENUE. 13 15 1. There is created in the office of the treasurer of 13 16 state a fund to be known as the general replacement tax fund. 13 17 All moneys received by the department from the replacement tax 13 18 collected pursuant to this chapter shall be deposited by the 13 19 director into the general replacement tax fund and allocated 13 20 and disbursed by the director to each of the counties 13 21 throughout the state on the basis of the general allocation 13 22 formula determined by the director on or before the thirtieth 13 23 day following the date on which the replacement tax is due to 13 24 the state. The director shall determine the general 13 25 allocation formula on the basis of the allocation to each of 13 26 the counties of property tax revenues attributable to 13 27 taxpayers which were payable in the fiscal year beginning July 13 28 1, 1997. 13 29 2. At the first meeting of the board of supervisors held 13 30 after the replacement tax proceeds have been received by the 13 31 county treasurer, the board shall cause such revenues to be 13 32 allocated to the local taxing districts within the county on 13 33 the basis of the allocation formula determined by the county 13 34 for the allocation of such funds. The board of supervisors 13 35 shall determine the general allocation formula on the basis of 14 1 the allocation to each of the local taxing districts of 14 2 property tax revenues attributable to taxpayers which were 14 3 payable in the fiscal year beginning July 1, 1997. 14 4 3. The replacement tax remitted to the director by each 14 5 taxpayer shall be treated as a property tax when collected by 14 6 the county treasurer and shall be disposed of by the county 14 7 treasurer as taxes on real estate. None of the amendments to 14 8 chapter 437A shall impact the value which the local taxing 14 9 jurisdictions have assigned to the property of any of the 14 10 taxpayers impacted by this chapter as a result of a 14 11 certification issued by the director of the department of 14 12 revenue and finance on the last certification prior to the 14 13 effective date of this bill. However, the value shall not be 14 14 used to impose a local property tax on property otherwise 14 15 exempt pursuant to section 437A.13. 14 16 Sec. 16. NEW SECTION. 437A.13 ASSESSMENT EXCLUSIVE. 14 17 Except for a municipal or electric cooperative established 14 18 prior to January 1, 1997, all property used by or useful to an 14 19 electric company or a natural gas company which company is 14 20 subject to taxation under this chapter, is exempt from any 14 21 other assessment or taxation under sections 428.24 through 14 22 428.26, 428.28, and 428.29, except as otherwise provided in 14 23 this chapter. In addition, all property of persons subject to 14 24 taxation under this chapter, that is used or useful in the 14 25 production, delivery, service, or sales of electricity is 14 26 exempt from any other assessment or taxation under sections 14 27 428.24 through 428.26, 428.28, and 428.29, except as otherwise 14 28 provided in this chapter. 14 29 Sec. 17. Section 438.2, Code 1997, is amended to read as 14 30 follows: 14 31 438.2 DEFINITIONS. 14 32 The words "pipeline company" as used in this chaptershall14 33beare deemed and construed to mean any person, copartnership, 14 34 association, corporation or syndicate that may own or operate 14 35 or be engaged in operating or utilizing pipelines for the 15 1 purposes described in section 438.1. Effective January 1, 15 2 1997, the words "pipeline company" do not include any natural 15 3 gas company, as defined in section 437A.1, but the term 15 4 includes a municipal as defined in section 437A.1, which was 15 5 established prior to January 1, 1997. 15 6 Sec. 18. Section 476.6, Code 1997, is amended by adding 15 7 the following new subsection: 15 8 NEW SUBSECTION. 22. The costs of the replacement tax 15 9 imposed pursuant to chapter 437A shall be reflected in the 15 10 delivery charges of utilities subject to rate regulation, in 15 11 lieu of the taxes replaced. 15 12 If the rate-regulated utility includes the replacement tax 15 13 costs in its base rates the costs shall be allocated among 15 14 customer rate classes in a manner comparable to similar 15 15 expenses. 15 16 If a rate-regulated utility files a tariff to collect the 15 17 replacement tax, it shall not be deemed to be a rate change 15 18 for purposes of this chapter. The board shall approve such 15 19 tariff if it finds that the tariff is designed to 15 20 substantially collect the replacement tax to be remitted to 15 21 the state and the replacement tax amount is applied in the 15 22 utility's charges in a reasonable manner. 15 23 Sec. 19. LEGISLATIVE INTENT. It is the intent of the 15 24 general assembly that the incidence of tax relating to the 15 25 delivery of electricity and natural gas to Iowa customers 15 26 should fall upon the entity delivering the electricity or 15 27 natural gas, rather than the consumer, as provided under 15 28 current law. However, if no delivery is involved the 15 29 responsibility for remittance of the replacement tax shall 15 30 fall upon the end user. 15 31 Sec. 20. EFFECTIVE DATE. The provisions of this Act 15 32 relating to the manner in which electric companies, natural 15 33 gas companies, and other persons are to remit a replacement 15 34 tax with respect to production, delivery, service, or sales of 15 35 electricity and natural gas, as well as the use of electricity 16 1 and natural gas within this state, are retroactively 16 2 applicable to property tax assessment years beginning on or 16 3 after January 1, 1997, and to replacement tax years beginning 16 4 on or after January 1, 1997. 16 5 EXPLANATION 16 6 This bill generally replaces the current central property 16 7 tax assessment procedures utilized by the director of the 16 8 department of revenue and finance in valuing property of 16 9 entities involved primarily in the production, delivery, 16 10 service and sales of electricity and natural gas within the 16 11 state, whether such entities are formed or organized under the 16 12 laws of the state or elsewhere, with a replacement tax on the 16 13 delivery or use of electricity and natural gas. 16 14 New Code chapter 437A is created which establishes the 16 15 replacement tax. New Code section 437A.1 establishes the 16 16 definitions of key terms used in the chapter, including 16 17 "consolidation", "consumer", "electric company", "electric 16 18 cooperative", "municipal", "natural gas company", "person", 16 19 "replacement tax", "service area", "taxpayer", and "tax year". 16 20 New Code section 437A.2 establishes the replacement tax 16 21 formula for an electric company based upon the number of 16 22 kilowatt-hours of electricity delivered within the state. 16 23 Certain exceptions are established to the imposition of the 16 24 tax including electricity transferred between two electric 16 25 companies having at least a 50 percent direct or indirect 16 26 ownership interest in each other, a municipal or an electric 16 27 cooperative to the extent the electricity is delivered within 16 28 such utility's service area as the area is in effect as of 16 29 January 1, 1997, and an electric company or other person for 16 30 electricity used in the production, delivery, service, or 16 31 sales of electricity or natural gas by such company or person. 16 32 New Code section 437A.3 establishes the replacement tax 16 33 formula for a natural gas company based upon the number of 16 34 therms of natural gas delivered within the state. Certain 16 35 exceptions are established to the imposition of the tax 17 1 including natural gas transferred between two natural gas 17 2 companies having at least a 50 percent direct or indirect 17 3 ownership interest in each other, a municipal to the extent 17 4 the natural gas is delivered within such municipal's service 17 5 area as the area is in effect as of January 1, 1997, and a 17 6 natural gas company or other person for natural gas used in 17 7 the production, delivery, service, or sales of electricity or 17 8 natural gas by such company or person. 17 9 New Code section 437A.4 establishes the replacement tax for 17 10 a person generating electricity in this state other than a 17 11 municipal or an electric cooperative. 17 12 New Code sections 437A.5 through 437A.11 establish 17 13 procedures and general provisions relating to the collection 17 14 and payment of the replacement tax including return and 17 15 payment requirements for persons subject to the replacement 17 16 tax, the procedures upon failing to file a return or for 17 17 filing an incorrect return, judicial review of the actions of 17 18 the director of the department of revenue and finance, statute 17 19 applicable to the replacement tax, process for serving notice 17 20 under the chapter, penalties and offenses, refunds or credits 17 21 of replacement tax paid, and the confidentiality of 17 22 information contained in a replacement tax return. 17 23 New Code section 437A.12 provides that the replacement tax 17 24 is to be treated as a property tax and provides for the 17 25 allocation of revenue collected under the replacement tax 17 26 based upon property taxes collected during the 1997-1998 17 27 fiscal year. 17 28 New Code section 437A.13 provides that the assessment under 17 29 chapter 437A is exclusive unless otherwise provided under the 17 30 chapter. 17 31 Conforming amendments are made to sections 427B.17, 428.37, 17 32 438.2, and 476.6. 17 33 The bill provides for retroactive applicability to property 17 34 tax assessment years beginning on or after January 1, 1997, 17 35 and to replacement tax years beginning on or after January 1, 18 1 1997. 18 2 LSB 1815YC 77 18 3 mj/jj/8.1
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