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PAG LIN 1 1 DIVISION I – INTRODUCTORY PROVISIONS 1 2 Section 1. LEGISLATIVE FINDINGS. The general assembly 1 3 finds that with the advent of restructuring of the electric 1 4 and natural gas utility industry, a competitive environment 1 5 will replace the current regulated monopoly environment. 1 6 Currently, utility companies are subject to property taxes 1 7 which are levied in various amounts with respect to utility 1 8 property located in areas serviced by the utility companies. 1 9 If the property tax, as currently levied, continues, the 1 10 property tax costs in Iowa will become a factor among 1 11 competitors in the pricing of electricity and natural gas. 1 12 Moreover, non-Iowa located electricity and natural gas 1 13 suppliers do not have property in Iowa subject to property tax 1 14 and to the extent that they are located in a low property tax 1 15 state, such property tax costs would grant to such non-Iowa 1 16 suppliers an unfair tax advantage over Iowa-based utility 1 17 companies. 1 18 The general assembly also finds that restructuring may 1 19 result in the loss of in-lieu-of-tax transfers from surplus 1 20 funds made by a municipal utility to the city. These 1 21 transfers take the place of a property tax and are recognized 1 22 in this Act as such. 1 23 Therefore, the general assembly finds that a need exists to 1 24 replace the current Iowa property tax system levied on 1 25 electric and natural gas utility companies located in Iowa. 1 26 However, any replacement tax needs to be revenue neutral so as 1 27 not to harm the fiscal stability of local governments which 1 28 depend upon such utility property taxes and municipal 1 29 transfers, and further, so as to negate tax costs as a factor 1 30 in a competitive utility industry environment. Additionally, 1 31 such replacement tax must allow fair and competitive prices 1 32 for consumers of electric and natural gas services, and 1 33 minimize the impact on the cost of such services to consumers. 1 34 The general assembly, therefore, finds that the replacement 1 35 tax should be imposed on the generation, transmission, and 2 1 delivery of electricity and natural gas. Statewide generation 2 2 and transmission taxes are necessary to ensure that in the 2 3 event such functions are conducted by stand-alone generation 2 4 and transmission companies, such companies will continue to 2 5 contribute to the tax base. However, imposition of a single 2 6 statewide delivery tax rate would unfairly increase tax costs 2 7 for some taxpayers while reducing such costs for others. Such 2 8 a result would impede a competitive environment and disrupt 2 9 the tax continuity for taxpayers, and has the potential to 2 10 unnecessarily increase costs for consumers of gas and 2 11 electricity. Therefore, to maintain tax continuity and tax 2 12 revenues for local government and to maintain tax continuity 2 13 and negate tax costs as a factor in a competitive environment 2 14 for taxpayers and consumers, the delivery tax rates should be 2 15 fixed by geographic service areas which are designed and 2 16 structured to accomplish these goals. 2 17 The current property tax valuation process for utility 2 18 companies is complex and time-consuming to administer. The 2 19 replacement tax eases this administrative burden on state 2 20 government. 2 21 SUBCHAPTER 1 2 22 INTRODUCTORY PROVISIONS 2 23 Sec. 2. NEW SECTION. 437A.1 CLASSIFICATION OF CHAPTER. 2 24 The provisions of this chapter are classified and 2 25 designated as follows: 2 26 Subchapter 1 Introductory Provisions. 2 27 Subchapter 2 Generation, Transmission, and Delivery 2 28 Taxes. 2 29 Subchapter 3 Statewide Property Tax. 2 30 Subchapter 4 General Provisions. 2 31 Sec. 3. NEW SECTION. 437A.2 PURPOSES. 2 32 The purposes of this chapter are to replace property taxes 2 33 imposed on electric companies, natural gas companies, electric 2 34 cooperatives, and municipal utilities with a system of 2 35 taxation which will remove tax costs as a factor in a 3 1 competitive environment by imposing like generation, 3 2 transmission, and delivery taxes on similarly situated 3 3 competitors who generate, transmit, or deliver electricity or 3 4 natural gas in the same competitive service area, to preserve 3 5 revenue neutrality and debt capacity for local governments and 3 6 taxpayers, to preserve neutrality in the allocation and cost 3 7 impact of any replacement tax among and upon consumers of 3 8 electricity and natural gas in this state, and to provide a 3 9 system of taxation which reduces existing administrative 3 10 burdens on state government. 3 11 Sec. 4. NEW SECTION. 437A.3 DEFINITIONS. 3 12 As used in this chapter, unless the context otherwise 3 13 requires: 3 14 1. "Assessed value" means the base year assessed value, as 3 15 adjusted by section 437A.20, subsection 2. "Base year 3 16 assessed value", for a taxpayer other than an electric 3 17 company, natural gas company, or electric cooperative, means 3 18 the value attributable to property identified in section 3 19 427A.1, subsection 1, paragraph "h", certified by the 3 20 department of revenue and finance to the county auditors for 3 21 the assessment date of January 1, 1997, and the value 3 22 attributable to property identified in section 427A.1 and 3 23 section 427B.17, subsection 5, as certified by the local 3 24 assessors to the county auditors for the assessment date of 3 25 January 1, 1997. 3 26 For taxpayers that are electric companies, natural gas 3 27 companies, and electric cooperatives, "base year assessed 3 28 value" means the average of these values for the assessment 3 29 dates of January 1, 1992, through January 1, 1996. "Base year 3 30 assessed value" does not include value attributable to steam- 3 31 operating property. 3 32 2. "Centrally assessed property tax" means property tax 3 33 imposed with respect to the value of property determined by 3 34 the director pursuant to section 427.1, subsection 2, section 3 35 428.29, and chapter 437, Code 1997, and allocated to electric 4 1 and natural gas service, and property tax imposed with respect 4 2 to the value of property determined by the director pursuant 4 3 to chapter 437, Code 1997, and allocated to electric and 4 4 natural service. 4 5 3. "Consumer" means an end user of electricity or natural 4 6 gas used or consumed within this state. "Consumer" includes 4 7 any master-metered facility even though the electricity or 4 8 natural gas delivered to such facility may ultimately be used 4 9 by another person. A person to whom electricity or natural 4 10 gas is delivered by a master-metered facility is not a 4 11 consumer. A "master-metered facility" means any multi- 4 12 occupancy premises where units are separately rented or owned 4 13 and where electricity or natural gas is used in centralized 4 14 heating, cooling, water-heating, or ventilation systems, where 4 15 individual metering is impractical, where the facility is 4 16 designated for elderly or handicapped persons and utility 4 17 costs constitute part of the operating cost and are not 4 18 apportioned to individual units, or where submetering or 4 19 resale of service was permitted prior to 1966. 4 20 4. "Delivery" means the physical transfer of electricity 4 21 or natural gas to a consumer. Physical transfer to a consumer 4 22 occurs when transportation of electricity or natural gas ends 4 23 and such electricity or natural gas becomes available for use 4 24 or consumption by a consumer. 4 25 5. "Director" means the director of revenue and finance. 4 26 6. "Electric company" means a person engaged primarily in 4 27 the production, delivery, service, or sales of electric energy 4 28 whether formed or organized under the laws of this state or 4 29 elsewhere. "Electric company" includes a combination natural 4 30 gas company and electric company. "Electric company" does not 4 31 include an electric cooperative or a municipal utility. 4 32 7. "Electric competitive service area" means an electric 4 33 service area assigned by the utilities board under chapter 476 4 34 as of January 1, 1998, including utility property and 4 35 facilities described in section 476.23, subsection 3, which 5 1 were owned and served by the electric company, electric 5 2 cooperative, or municipal utility serving such area on January 5 3 1, 1998. 5 4 8. "Electric cooperative" means an electric utility 5 5 provider formed or organized as an electric cooperative under 5 6 the laws of this state or elsewhere. An electric cooperative 5 7 shall also include an incorporated city utility provider. 5 8 "Generation and transmission electric cooperative" means an 5 9 electric cooperative which owns both transmission lines and 5 10 property which is used to generate electricity. "Distribution 5 11 electric cooperative" means an electric cooperative other than 5 12 a generation and transmission electric cooperative or a 5 13 municipal electric cooperative association. 5 14 9. "Electric power generating plant" means a name plate 5 15 rated electric power generating plant, which produces electric 5 16 energy from other forms of energy, including all taxable land, 5 17 buildings, and equipment used in the production of such 5 18 electric energy. 5 19 10. "Incorporated city utility provider" means a 5 20 corporation with assets worth one million dollars or more 5 21 which has one or more platted villages located within the 5 22 territorial limits of the tract of land which it owns, and 5 23 which provides electricity to ten thousand or fewer customers. 5 24 11. "Lease" means a contract between a lessor and lessee 5 25 pursuant to which the lessee obtains a present possessory 5 26 interest in tangible property without obtaining legal title in 5 27 such property. A contract to transmit or deliver electricity 5 28 or natural gas using operating property within this state is 5 29 not a lease. "Capital lease" means a lease classified as a 5 30 capital lease under generally accepted accounting principles. 5 31 12. "Local amount" means the first forty-four million four 5 32 hundred forty-four thousand four hundred forty-five dollars of 5 33 the acquisition cost of any major addition which is an 5 34 electric power generating plant and the total acquisition cost 5 35 of any other major addition. 6 1 13. "Local taxing district" means a city, county, 6 2 community college, school district, or other taxing district, 6 3 located in this state and authorized to certify a levy on 6 4 property located within such district for the payment of bonds 6 5 and interest or other obligations of such district. 6 6 14. "Low capacity factor electric power generating plant" 6 7 means, for any tax year, an electric power generating plant, 6 8 with the exception of an electric power generating plant owned 6 9 or leased by an electric company, an electric cooperative, or 6 10 a municipal utility, which operated during the preceding 6 11 calendar year at a net capacity factor of twenty percent or 6 12 less. "Net capacity factor" means net actual generation 6 13 during the preceding calendar year divided by the product of 6 14 nameplate capacity times the number of hours the plant was in 6 15 the active state during the preceding calendar year. Upon 6 16 commissioning, a plant is in the active state until it is 6 17 decommissioned. "Net actual generation" means net electrical 6 18 megawatt hours produced by a plant during the preceding 6 19 calendar year. 6 20 15. "Major addition" means any acquisition on or after 6 21 January 1, 1997, by a taxpayer, by transfer of ownership, 6 22 self-construction, or capital lease of any interest in any of 6 23 the following: 6 24 a. A building in this state where the acquisition cost of 6 25 all interests acquired exceeds ten million dollars. 6 26 b. An electric power generating plant where the 6 27 acquisition cost of all interests acquired exceeds ten million 6 28 dollars. For purposes of this paragraph, "electric power 6 29 generating plant" means each nameplate rated electric power 6 30 generating plant owned solely or jointly by any person or 6 31 electric power facility financed under the provisions of 6 32 chapter 28F in which electrical energy is produced from other 6 33 forms of energy, including all equipment used in the 6 34 production of such energy through its step-up transformer. 6 35 c. Natural gas operating property within a local taxing 7 1 district where the acquisition cost of all interests acquired 7 2 exceeds one million dollars. 7 3 d. Any operating property in this state by a person not 7 4 previously subject to taxation under this chapter. 7 5 For purposes of this chapter, the acquisition cost of an 7 6 asset acquired by capital lease is its capitalized value 7 7 determined under generally accepted accounting principles. 7 8 16. "Municipal electric cooperative association" means an 7 9 electric cooperative, the membership of which is composed 7 10 entirely of municipal utilities. 7 11 17. "Municipal utility" means a municipal electric 7 12 utility, including a jointly owned or operated municipal 7 13 electric utility or a municipal electric utility financed 7 14 under chapter 28F, or a municipal natural gas utility. 7 15 18. "Natural gas company" means a person that owns, 7 16 operates, or is engaged primarily in operating or utilizing 7 17 pipelines for the purpose of distributing natural gas to 7 18 consumers located within this state, excluding a gas 7 19 distributing plant or company located entirely within any city 7 20 and not a part of a pipeline transportation company. "Natural 7 21 gas company" includes a combination natural gas company and 7 22 electric company. "Natural gas company" does not include a 7 23 municipal utility. 7 24 19. a. "Natural gas competitive service area" means any 7 25 of the fifty-two natural gas competitive service areas 7 26 described as follows: 7 27 (1) Each of the following municipal natural gas 7 28 competitive service areas: 7 29 (a) Taylor county, except for those areas of Taylor county 7 30 which are contained within another municipal natural gas 7 31 competitive service area as described in this subsection. 7 32 (b) The city of Brighton in Washington county and the area 7 33 within two miles of the city limits plus sections 5, 6, 7, 8, 7 34 17, 18, 19, 20, 29, and 30 in Brighton township; sections 19, 7 35 30, and 33 in Franklin township; sections 1, 2, 11, 12, 13, 8 1 14, 23, 24, 25, and 36 in Dutch Creek township; and sections 8 2 25, 26, 35, and 36 in Seventy-Six township. 8 3 (c) Davis county. 8 4 (d) The city of Brooklyn in Poweshiek county and the area 8 5 within two miles of the city limits. 8 6 (e) The city of Cascade in Dubuque county and the area 8 7 within two miles of the city limits. 8 8 (f) The city of Cedar Falls in Black Hawk county and the 8 9 area within one mile of the city limits, not including any 8 10 part of the city of Waterloo. 8 11 (g) The city of Clearfield in Taylor county and the area 8 12 within two miles of the city limits and sections 20, 21, 26, 8 13 and 27 of Platte township, Grant township in Taylor county, 8 14 and Grant township in Ringgold county. 8 15 (h) The south half of Carroll county and sections 3 and 4 8 16 of Orange township in Guthrie county. 8 17 (i) Adams county, except those areas of Adams county which 8 18 are contained within another municipal natural gas competitive 8 19 service area as defined in this subsection. 8 20 (j) The city of Emmetsburg in Palo Alto county and the 8 21 area within two miles of the city limits. 8 22 (k) The city of Everly, in Clay county and the area within 8 23 two miles of the city limits. 8 24 (l) The city of Fairbank and the area within two miles of 8 25 the city limits plus the area one-quarter mile on either side 8 26 of the county line road, Highway 281, from Fairbank to the 8 27 intersection of Outer Road and Tenth Street, proceeding 8 28 twenty-eight hundredths of a mile north in Buchanan and 8 29 Fayette counties. 8 30 (m) The city of Gilmore City in Pocahontas and Humboldt 8 31 counties and the area within two miles of the city limits. 8 32 (n) The city of Graettinger in Palo Alto county and the 8 33 area within two miles of the city limits. 8 34 (o) The city of Guthrie Center, in Guthrie county and the 8 35 area within one mile of the city limits. 9 1 (p) The city of Harlan in Shelby county and the area 9 2 within two miles of the city limits. 9 3 (q) The city of Hartley in O'Brien county and the area 9 4 within one mile of the city limits, except the eastern one- 9 5 half of section four in Omega township. 9 6 (r) The city of Hawarden in Sioux county and the area 9 7 within two miles of the city limits. 9 8 (s) The city of Lake Park plus Silver Lake township in 9 9 Dickinson county. 9 10 (t) Fayette and New Buda townships in Decator county. 9 11 (u) The city of Lenox in Taylor county including section 1 9 12 of Platte township in Taylor county and the townships of Carl, 9 13 Grant, Mercer, Colony, Union, and Prescott in Adams county. 9 14 (v) Grand River township in Wayne county. 9 15 (w) New Hope township in Union county and Monroe township 9 16 in Madison county. 9 17 (x) Ewoldt and Eden townships in Carroll county and Iowa 9 18 township in Crawford county. 9 19 (y) The city of Montezuma in Poweshiek county and the area 9 20 within two miles of the city limits plus Jackson township in 9 21 Poweshiek county except the city of Barnes City, Pleasant 9 22 Grove and Monroe townships in Mahaska county except the city 9 23 of Barnes City. 9 24 (z) Morning Sun township in Louisa county. 9 25 (aa) Wells and Washington townships in Appanoose county. 9 26 (ab) The city of Osage in Mitchell county and the area 9 27 within two miles of the city limits. 9 28 (ac) The city of Prescott in Adams county and the area 9 29 within two miles of the city limits. 9 30 (ad) The city of Preston in Jackson county and the area 9 31 within two miles of the city limits. 9 32 (ae) The city of Remsen in Plymouth county and the area 9 33 within two miles of the city limits. 9 34 (af) The city of Rock Rapids in Lyon county and the area 9 35 within two miles of the city limits. 10 1 (ag) The city of Rolfe in Pocahontas county and the area 10 2 within two miles of the city limits. 10 3 (ah) The city of Sabula in Jackson county and the area 10 4 within two miles of the city limits. 10 5 (ai) The city of Sac City in Sac county and the area 10 6 within two miles of the city limits. 10 7 (aj) The city of Sanborn in O'Brien county and the area 10 8 within two miles of the city limits. 10 9 (ak) The city of Sioux Center in Sioux county and the area 10 10 within two miles of the city limits. 10 11 (al) The city of Tipton in Cedar county and the area 10 12 within two miles of the city limits. 10 13 (am) The city of Waukee in Dallas county. 10 14 (an) The city of Wayland plus Jefferson and Trenton 10 15 townships in Henry county. 10 16 (ao) Seventy-Six and Lime Creek townships in Washington 10 17 county except for those areas of Seventy-Six township which 10 18 are contained within another municipal natural gas competitive 10 19 service area as defined in this subsection. 10 20 (ap) The city of West Bend in Kossuth and Palo Alto 10 21 counties and the area within two miles of the city limits. 10 22 (aq) The city of Whittemore in Kossuth county and the area 10 23 within two miles of the city limits. 10 24 (ar) Scott, Canaan, and Wayne townships in Henry county. 10 25 (as) The city of Woodbine in Harrison county and the area 10 26 within two miles of the city limits. 10 27 (at) Nishnabotna township in Crawford county. 10 28 (2) The natural gas competitive service area, excluding 10 29 any municipal natural gas competitive service area described 10 30 in subparagraph (1) and consisting of Sioux county; Plymouth 10 31 county; Woodbury county; Ida county; Harrison county; Shelby 10 32 county; Audubon county; Palo Alto county; Humboldt county; 10 33 Mahaska county; Scott county; Lyon county except Wheeler, 10 34 Dale, Liberal, Grant, Midland, and Elgin townships; O'Brien 10 35 county except Union, Dale, Summit, Highland, Franklin, and 11 1 Center townships; Cherokee county except Cherokee and Pilot 11 2 townships; Monona county except Franklin township and the 11 3 south half of Ashton township; Pottawattamie county except 11 4 Crescent, Hazel Dell, Lake, Garner, Kane, and Lewis townships; 11 5 Mills county except Glenwood and Center townships; Montgomery 11 6 county except Douglas, Washington, and East townships; Page 11 7 county except Valley, Douglas, Nodaway, Nebraska, Harlan, East 11 8 River, Amity, and Buchanan townships; Fremont county except 11 9 Green, Scott, Sidney, Benton, Washington, and Madison 11 10 townships; Brighton and Pleasant townships in Cass county; Sac 11 11 county except Clinton, Wall Lake, Coon Valley, Levey, Viola, 11 12 and Sac townships; Newell township in Buena Vista county; 11 13 Calhoun county except Reading township; Denmark township in 11 14 Emmet county; Kossuth county except Eagle, Grant, Springfield, 11 15 Hebron, Swea, Harrison, Ledyard, Lincoln, Seneca, Greenwood, 11 16 Ramsey, and German townships; Webster county except Roland, 11 17 Clay, Burnside, Yell, Webster, Gowrie, Lost Grove, Dayton, and 11 18 Hardin townships; Guthrie county except Grant, Thompson, and 11 19 Beaver townships; Union township in Union county; Madison 11 20 county except Ohio and New Hope townships; Warren county 11 21 except Virginia, Squaw, Liberty, and White Breast townships; 11 22 Cedar, Union, Bluff Creek, and Pleasant townships in Monroe 11 23 county; Marion county except Lake Prairie, Knoxville, Summit, 11 24 and Union townships; Dallas county except Des Moines and Grant 11 25 townships; Polk county except sections 4, 5, 6, 7, 8, 9, 16, 11 26 17, and 18 in Lincoln township and the city of Grimes, and 11 27 sections 1, 2, 3, 10, 11, 12, 13, 14, and 15 in Union 11 28 township; Poweshiek, Washington, Mound Prairie, Des Moines, 11 29 Elk Creek, and Fairview townships in Jasper county; Wright 11 30 county except Belmond and Pleasant townships; Geneseo township 11 31 in Cerro Gordo county; Franklin county except Wisner and Scott 11 32 townships and the city of Coulter; Butler county except 11 33 Bennezette, Coldwater, Dayton, and Fremont townships; Floyd 11 34 county except Rock Grove, Rudd, Rockford, Ulster, Scott, and 11 35 Union townships; Branford township in Chickasaw county; Bremer 12 1 county except Frederika, LeRoy, Sumner No. 2, Fremont, Dayton, 12 2 Maxfield, and Franklin townships; Perry, Washington, Westburg, 12 3 and Sumner townships in Buchanan county; Black Hawk county 12 4 except Big Creek township; Fremont township in Benton county; 12 5 Wapello county except Washington township; Benton and Steady 12 6 Run townships in Keokuk county; the city of Barnes City in 12 7 Poweshiek county; Iowa township in Washington county; Johnson 12 8 county except Fremont township; Linn county except Grant 12 9 Spring Grove, Jackson, Boulder, Washington, Monroe township 12 10 west and north of Otter Creek and County Home Road, Otter 12 11 Creek, Maine, Buffalo, Fayette, and Clinton townships; 12 12 Farmington township in Cedar county; Wapsinonoc, Goshen, 12 13 Moscow, Wilton, and Fulton townships in Muscatine county; and 12 14 Lee county except Des Moines, Montrose, Keokuk, and Jackson 12 15 townships. 12 16 (3) The natural gas competitive service area, excluding 12 17 any municipal natural gas competitive service areas described 12 18 in subparagraph (1) and consisting of that part of Kossuth 12 19 county not described in subparagraph (2); Lincoln and Buffalo 12 20 townships in Winnebago county; Worth county except Silver 12 21 Lake, Hartland, Bristol, Brookfield, Fertile, and Danville 12 22 townships; Cerro Gordo county except Grimes, Pleasant Valley, 12 23 and Dougherty townships; Rock Grove and Rudd townships in 12 24 Floyd county; Eden, Camanche, and Hampshire townships and the 12 25 city of Clinton in Clinton county; and Stacyville and Union 12 26 townships in Mitchell county. 12 27 (4) The natural gas competitive service area, excluding 12 28 any municipal natural gas service areas described in 12 29 subparagraph (1) and consisting of Franklin township and the 12 30 South Half of Ashton township in Monona county; Crescent, 12 31 Hazel Dell, Lake, Garner, Kane, and Lewis townships in 12 32 Pottawattamie county; Glenwood and Center townships in Mills 12 33 county; Green, Scott, Sidney, Benton, Washington, and Madison 12 34 townships in Fremont county; Cass, Bear Grove, Union, Noble, 12 35 Edna, Victoria, Massena, Lincoln, and Grant townships in Cass 13 1 county; Glidden township in Carroll county; Summit township in 13 2 Adair county; Grant township in Guthrie county; Crawford 13 3 county except Nishnabotna township; Clinton, Wall Lake, Coon 13 4 Valley, Levey, Viola, and Sac township in Sac county; Reading 13 5 township in Calhoun county; Marshall, Sherman, Roosevelt, 13 6 Dover, Grant, Lincoln, and Cedar townships in Pocahontas 13 7 county; Union, Dale, Summit, Highland, Franklin, and Center 13 8 townships in O'Brien county; the north half of Clay county 13 9 plus Clay township; Dickinson county; Emmet county except 13 10 Denmark, Armstrong Grove, and Iowa Lake townships; Greene 13 11 county except Bristol, Hardin, Jackson, and Grant townships; 13 12 Boone county except Worth, Colfax, Des Moines, Jackson, Dodge, 13 13 and Harrison townships; Des Moines and Grant townships in 13 14 Dallas county; Roland, Clay, Burnside, Yell, Webster, Gowrie, 13 15 Lost Grove, Dayton, and Newark townships in Webster county; 13 16 Clear Lake, Hamilton, Webster, Freedom, Independence, Cass, 13 17 and Fremont townships in Hamilton county; Ell, Madison, and 13 18 Ellington townships in Hancock county; Winnebago county except 13 19 Lincoln and Buffalo townships; Silver Lake, Hartland, Bristol, 13 20 Brookfield, Fertile, and Danville townships in Worth county; 13 21 Etna township in Hardin county; Lafayette township and the 13 22 west one-half of Howard township in Story county; the city of 13 23 Grimes in Polk county; Independence, Malaka, Mariposa, Hickory 13 24 Grove, Rock Creek, Kellogg, Newton, Sherman, Palo Alto, Buena 13 25 Vista, and Richland townships in Jasper county; Palermo, 13 26 Grant, and Fairfield townships in Grundy county; Bennezette, 13 27 Coldwater, Dayton, and Fremont townships in Butler county; 13 28 Rockford, Ulster, Scott, and Union townships in Floyd county; 13 29 St. Ansgar and Mitchell townships in Mitchell county; Howard 13 30 county; Chickasaw county except Branford township; Frederika, 13 31 LeRoy, Sumner No. 2, Fremont, Dayton, Maxfield, and Franklin 13 32 townships in Bremer county; Big Creek township in Black Hawk 13 33 county; Brown township in Linn county; Madison township and 13 34 the east half of Buffalo township in Buchanan county; Fayette 13 35 county except Harlan, Fremont, Oran, and Jefferson townships; 14 1 Winneshiek county; Alamakee county; Clayton county; Delaware 14 2 county except Adams and Hazel Green townships; Dubuque county; 14 3 Jones county except Rome, Hale, Oxford, and the east half of 14 4 Greenfield townships; and Jackson county. 14 5 (5) The natural gas competitive service area consisting of 14 6 Des Moines, Montrose, Keokuk, and Jackson townships in Lee 14 7 county. 14 8 (6) The natural gas competitive service area consisting of 14 9 the city of Allerton and the area within two miles of the city 14 10 limits. 14 11 (7) The natural gas competitive service area consisting of 14 12 all of Iowa not contained in any of the other natural gas 14 13 competitive service areas described in this paragraph. 14 14 b. "Township" includes any city or part of a city located 14 15 within the exterior boundaries of that township. 14 16 c. References to city limits contained in this subsection 14 17 mean those city limits as they existed on January 1, 1998. 14 18 20. "Operating property" means all property owned by or 14 19 leased to an electric company, electric cooperative, municipal 14 20 utility, or natural gas company, not otherwise taxed 14 21 separately, which is necessary to and without which the 14 22 company could not perform the activities of an electric 14 23 company, electric cooperative, municipal utility, or natural 14 24 gas company. 14 25 21. "Pole miles" means miles measured along the line of 14 26 poles, structures, or towers carrying electric conductors 14 27 regardless of the number of conductors or circuits carried, 14 28 and miles of conduit bank, regardless of number of conduits or 14 29 ducts, of all sizes and types, including manholes and 14 30 handholes. "Conduit bank" means a length of one or more 14 31 underground conduits or ducts, whether or not enclosed in 14 32 concrete, designed to contain underground cables, including a 14 33 gallery or cable tunnel for power cables. 14 34 22. "Purchasing member" means a municipal utility which 14 35 purchases electricity from a municipal electric cooperative 15 1 association of which it is a member. 15 2 23. "Replacement tax" means the excise tax imposed on the 15 3 generation, transmission, delivery, consumption, or use of 15 4 electricity or natural gas under sections 437A.4, 437A.5, 15 5 437A.6, or 437A.7. 15 6 24. "Statewide amount" means the acquisition cost of any 15 7 major addition which is not a local amount. 15 8 25. "Taxpayer" means an electric company, natural gas 15 9 company, electric cooperative, municipal utility, or other 15 10 person subject to the replacement tax imposed under section 15 11 437A.4, 437A.5, 437A.6, or 437A.7. 15 12 26. "Tax year" means a calendar year beginning January 1 15 13 and ending December 31. 15 14 27. "Transfer replacement tax" means the tax imposed in a 15 15 competitive service area of a municipal utility which replaces 15 16 transfers made by the municipal utility in accordance with 15 17 section 384.89. 15 18 28. "Transmission line" means a line, wire, or cable which 15 19 is capable of operating at an electric voltage of at least 15 20 thirty-four and one-half kilovolts. 15 21 29. "Utilities board" means the utilities board created in 15 22 section 474.1. 15 23 SUBCHAPTER 2 15 24 GENERATION, TRANSMISSION, AND DELIVERY TAXES 15 25 Sec. 5. NEW SECTION. 437A.4 REPLACEMENT TAX IMPOSED ON 15 26 DELIVERY OF ELECTRICITY. 15 27 1. A replacement delivery tax is imposed on every person 15 28 who makes a delivery of electricity to a consumer within this 15 29 state. The replacement delivery tax imposed by this section 15 30 is equal to the sum of the following: 15 31 a. The number of kilowatt-hours of electricity delivered 15 32 to consumers by the taxpayer within each electric competitive 15 33 service area during the tax year multiplied by the electric 15 34 replacement delivery tax rate in effect for each such electric 15 35 competitive service area. 16 1 b. Where applicable, and in addition to the tax imposed by 16 2 paragraph "a", the number of kilowatt-hours of electricity 16 3 delivered to consumers by the taxpayer within each electric 16 4 competitive service area during the tax year multiplied by the 16 5 electric transfer replacement tax rate for each such electric 16 6 competitive service area. 16 7 2. If electricity is consumed in this state, whether such 16 8 electricity is purchased, transferred, or self-generated, and 16 9 the delivery, purchase, transference, or self-generation of 16 10 such electricity is not subject to the tax imposed under 16 11 subsection 1, a tax is imposed on the consumer at the rates 16 12 prescribed under subsection 1. 16 13 3. Electric replacement delivery tax rates shall be 16 14 calculated by the director for each electric competitive 16 15 service area as follows: 16 16 a. The director shall determine the average centrally 16 17 assessed property tax liability allocated to electric service 16 18 of each taxpayer, other than a municipal utility, principally 16 19 serving an electric competitive service area and of each 16 20 generation and transmission electric cooperative for the 16 21 assessment years 1992 through 1996 based on property tax 16 22 payments made. In the case of a municipal utility, the 16 23 average centrally assessed property tax liability allocated to 16 24 electric service is the centrally assessed property tax 16 25 liability of such municipal utility allocated to electric 16 26 service for the 1996 assessment year based on property tax 16 27 payments made. 16 28 b. The director shall determine, for each taxpayer, the 16 29 number of kilowatt-hours of electricity generated which would 16 30 have been subject to taxation under section 437A.6, the number 16 31 of pole miles which would have been subject to taxation under 16 32 section 437A.7, and the number of kilowatt-hours of 16 33 electricity delivered to consumers which would have been 16 34 subject to taxation under this section in calendar year 1997, 16 35 had such sections been in effect for calendar year 1997. 17 1 c. The director shall determine the electric generation, 17 2 transmission, and delivery tax components of the average 17 3 centrally assessed property tax liability determined in 17 4 paragraph "a" for each electric competitive service area as 17 5 follows: 17 6 (1) The electric generation tax component for an electric 17 7 competitive service area shall be computed by multiplying the 17 8 tax rate set forth in section 437A.6 by the number of 17 9 kilowatt-hours of electricity generated by the taxpayer 17 10 principally serving such electric competitive service area 17 11 which would have been subject to taxation under section 437A.6 17 12 in calendar year 1997, had that section been in effect for 17 13 calendar year 1997. 17 14 (2) The electric transmission tax component for an 17 15 electric competitive service area shall be computed by 17 16 multiplying the tax rates set forth in section 437A.7 by the 17 17 number of pole miles for each line voltage owned or leased by 17 18 the taxpayer principally serving such electric competitive 17 19 service area which would have been subject to taxation under 17 20 section 437A.7 on December 31, 1997, had that section been in 17 21 effect for calendar year 1997. 17 22 (3) The electric delivery tax component for an electric 17 23 competitive service area shall be the average centrally 17 24 assessed property tax liability allocated to electric service 17 25 of the taxpayer principally serving such electric competitive 17 26 service area less the electric generation and transmission tax 17 27 components computed for such electric competitive service 17 28 area. 17 29 (4) The electric delivery tax component for each electric 17 30 competitive service area shall be adjusted, as necessary, to 17 31 assign the excess property tax liability of each generation 17 32 and transmission electric cooperative to the electric 17 33 competitive service areas principally served on January 1, 17 34 1998, by its distribution electric cooperative members and by 17 35 those municipal utilities which were purchasing members of a 18 1 municipal electric cooperative association that is a member of 18 2 the generation and transmission electric cooperative. Such 18 3 assignment of excess property tax liability of each such 18 4 generation and transmission electric cooperative shall be made 18 5 in proportion to the appropriate wholesale rate charges in 18 6 calendar year 1997 to its distribution electric cooperative 18 7 members and municipal electric cooperative association members 18 8 which purchased electricity from the generation and 18 9 transmission electric cooperative. Any amount assignable to a 18 10 municipal electric cooperative association shall be reassigned 18 11 to the electric competitive service areas served by such 18 12 association's purchasing municipal utility members and shall 18 13 be allocated among them in proportion to the appropriate 18 14 wholesale rate charges in calendar year 1997 by such municipal 18 15 electric cooperative association to its purchasing municipal 18 16 utility members. For purposes of this subsection, "excess 18 17 property tax liability" means the amount by which the average 18 18 centrally assessed property tax liability for the assessment 18 19 years 1992 through 1996 of a generation and transmission 18 20 electric cooperative exceeds the tentative generation and 18 21 transmission taxes which would have been imposed on such 18 22 generation and transmission electric cooperative under 18 23 sections 437A.6 and 437A.7 for calendar year 1997, had such 18 24 taxes been in effect for calendar year 1997. An electric 18 25 cooperative described in section 437A.7, subsection 2, 18 26 paragraph "c", is deemed not to have any excess property tax 18 27 liability. 18 28 d. The director shall determine an electric delivery tax 18 29 rate for each electric competitive service area by dividing 18 30 the electric delivery tax component for the electric 18 31 competitive service area, as adjusted by paragraph "c", 18 32 subparagraph (4), by the number of kilowatt-hours delivered by 18 33 the taxpayer principally serving the electric competitive 18 34 service area to consumers in calendar year 1997, which would 18 35 have been subject to taxation under this section if this 19 1 section had been in effect for calendar year 1997. 19 2 4. Municipal electric transfer replacement tax rates shall 19 3 be calculated annually by the city council of each city 19 4 located within an electric competitive service area served by 19 5 a municipal utility as of January 1, 1998, by dividing the 19 6 average annual dollar amount of electric related transfers 19 7 made pursuant to section 384.89 by the municipal utility 19 8 serving the electric competitive service area, other than 19 9 those transfers declared exempt from the transfer replacement 19 10 tax by the city council, plus the municipal transfer 19 11 replacement tax received by the municipality, if any, during 19 12 the five immediately preceding calendar years by the number of 19 13 kilowatt-hours of electricity delivered to consumers in the 19 14 electric competitive service area during the immediately 19 15 preceding calendar year which were subject to taxation under 19 16 this section or which would have been subject to taxation 19 17 under this section had it been in effect for such calendar 19 18 year. The city council on its own motion, or in the case of a 19 19 municipal utility governed by a board of trustees under 19 20 chapter 388 upon a resolution of the board of trustees 19 21 requesting such action, may declare any transfer or part of 19 22 such transfer to be exempt from the transfer replacement tax 19 23 under this section. Such rates shall be calculated and 19 24 reported to the director on or before August 31 of each tax 19 25 year. 19 26 5. A municipal utility taxpayer is entitled to a credit 19 27 against the municipal electric transfer replacement tax equal 19 28 to the average amount of electric-related transfers made by 19 29 such municipal utility taxpayer under section 384.89, other 19 30 than those transfers declared exempt from transfer replacement 19 31 tax by the city council, during the preceding five calendar 19 32 years. 19 33 6. The following are not subject to the replacement 19 34 delivery tax imposed by subsections 1 and 2: 19 35 a. Delivery of electricity generated by a low capacity 20 1 factor electric power generating plant. 20 2 b. Delivery of electricity to a city from such city's 20 3 municipal utility, provided such electricity is used by the 20 4 city for the public purposes of the city. 20 5 c. Electricity consumed by a state university or 20 6 university of science and technology, provided such 20 7 electricity was generated by property described in section 20 8 427.1, subsection 1. 20 9 7. Notwithstanding subsection 1, the electric delivery tax 20 10 rate applied to kilowatt-hours of electricity delivered by a 20 11 taxpayer to utility property and facilities which are placed 20 12 in service on or after January 1, 1998, and are owned by or 20 13 leased to and initially served by such taxpayer shall be the 20 14 electric delivery tax rate in effect for the electric 20 15 competitive service area principally served by such utility 20 16 property and facilities even though such utility property and 20 17 facilities may be physically located in another electric 20 18 competitive service area. 20 19 8. If for any tax year after calendar year 1997, the total 20 20 taxable kilowatt-hours of electricity required to be reported 20 21 by taxpayers pursuant to section 437A.8, subsection 1, 20 22 paragraphs "a" and "b", with respect to any electric 20 23 competitive service area, increases or decreases by more than 20 24 the threshold percentage from the average of the base year 20 25 amounts for that electric competitive service area during the 20 26 immediately preceding five calendar years, the tax rate 20 27 imposed under subsection 1, paragraph "a", and subsection 2, 20 28 for that tax year shall be recalculated by the director for 20 29 that electric competitive service area so that the total of 20 30 the replacement electric delivery taxes required to be 20 31 reported pursuant to section 437A.8, subsection 1, paragraph 20 32 "e", for that electric competitive service area with respect 20 33 to the tax imposed under subsection 1, paragraph "a", and 20 34 subsection 2, shall be as follows: 20 35 a. If the number of kilowatt-hours of electricity required 21 1 to be reported increased by more than the threshold 21 2 percentage, one hundred two percent of such taxes required to 21 3 be reported by taxpayers for that electric competitive service 21 4 area for the immediately preceding tax year. 21 5 b. If the number of kilowatt-hours of electricity required 21 6 to be reported decreased by more than the threshold 21 7 percentage, ninety-eight percent of such taxes required to be 21 8 reported by taxpayers for that electric competitive service 21 9 area for the immediately preceding tax year. 21 10 For purposes of paragraphs "a" and "b", in computing the 21 11 tax rate under subsection 1, paragraph "a", and subsection 2, 21 12 for tax year 1998, the director shall use the electric 21 13 delivery tax component computed for the electric competitive 21 14 service area pursuant to subsection 3, paragraph "c", in lieu 21 15 of the taxes required to be reported for that electric 21 16 competitive service area for the immediately preceding tax 21 17 year. 21 18 The threshold percentage shall be determined annually and 21 19 shall be eight percent for any electric competitive service 21 20 area in which the average of the base year amounts for the 21 21 preceding five calendar years does not exceed three billion 21 22 kilowatt-hours, and ten percent for all other electric 21 23 competitive service areas. 21 24 Any such recalculation of an electric delivery tax rate, if 21 25 required, shall be made and the new rate shall be published in 21 26 the Iowa administrative bulletin by the director by no later 21 27 than May 31 following the tax year. The director shall adjust 21 28 the tentative replacement tax imposed by subsection 1, 21 29 paragraph "a", and subsection 2 required to be shown on any 21 30 affected taxpayer's return pursuant to section 437A.8, 21 31 subsection 1, paragraph "e", to reflect the adjusted delivery 21 32 tax rate for the tax year, and report such adjustment to the 21 33 affected taxpayer on or before June 30 following the tax year. 21 34 The new electric delivery tax rate shall apply prospectively, 21 35 until such time as further adjustment is required. 22 1 For purposes of this section, "base year amount" means for 22 2 calendar years prior to tax year 1998, the sum of the 22 3 kilowatt-hours of electricity delivered to consumers within an 22 4 electric competitive service area by the taxpayer principally 22 5 serving such electric competitive service area which would 22 6 have been subject to taxation under this section had this 22 7 section been in effect for those years; and for tax years 22 8 after calendar year 1997, the taxable kilowatt-hours of 22 9 electricity required to be reported by taxpayers pursuant to 22 10 section 437A.8, subsection 1, paragraphs "a" and "b", with 22 11 respect to any electric competitive service area. 22 12 9. a. After calendar year 1997, if a municipal electric 22 13 cooperative association ceases to purchase electricity from 22 14 the generation and transmission electric cooperative from 22 15 which it purchased electricity in 1997, and for a period of 22 16 ninety days after such purchases cease, no municipal utility 22 17 member of such association purchases electricity from such 22 18 generation and transmission electric cooperative, the excess 22 19 property tax liability assigned pursuant to subsection 3, 22 20 paragraph "c", subparagraph (4), to the electric competitive 22 21 service areas principally served by the municipal utility 22 22 members on January 1, 1998, shall be removed from the electric 22 23 delivery tax component of those electric competitive service 22 24 areas and the electric delivery tax rate for those electric 22 25 competitive service areas shall be recalculated to reflect 22 26 that change. 22 27 b. After calendar year 1997, if a municipal utility ceases 22 28 to be a purchasing member of a municipal electric cooperative 22 29 association which purchased electricity in calendar year 1997 22 30 from a generation and transmission electric cooperative, and 22 31 for a period of ninety days after the municipal utility ceases 22 32 to be a purchasing member of such association such municipal 22 33 utility does not purchase electricity from such generation and 22 34 transmission electric cooperative, the excess property tax 22 35 liability assigned pursuant to subsection 3, paragraph "c", 23 1 subparagraph (4), to the electric competitive service area 23 2 principally served by the municipal utility on January 1, 23 3 1998, shall be removed from the electric delivery tax 23 4 component of those electric competitive service areas and the 23 5 electric delivery tax rate for those electric competitive 23 6 service areas shall be recalculated to reflect that change. 23 7 c. If a recalculation has previously been made by the 23 8 director pursuant to subsection 8 for an electric competitive 23 9 service area described in this subsection, the recalculation 23 10 required by this subsection shall be made by the director by 23 11 modifying the most recent recalculation under subsection 8 to 23 12 eliminate the excess property tax liability originally 23 13 allocated to such electric competitive service area under 23 14 subsection 3, paragraph "c", subparagraph (4). 23 15 d. Any recalculation required by this subsection shall be 23 16 made and the new rate shall be published in the Iowa 23 17 administrative bulletin by the director by May 31 of the 23 18 calendar year during which the events described in paragraphs 23 19 "a" and "b" are reported as provided in section 437A.8, 23 20 subsection 1, paragraph "f". The new electric delivery tax 23 21 rate shall be effective January 1 of the tax year in which it 23 22 is published and shall apply prospectively, until such time as 23 23 further adjustment is required. 23 24 10. The electric delivery tax rate in effect for each 23 25 electric competitive service area shall be published by the 23 26 director in the Iowa administrative bulletin on or before 23 27 November 30, 1998, and annually after that date, during the 23 28 last quarter of the tax year. 23 29 Sec. 6. NEW SECTION. 437A.5 REPLACEMENT TAX IMPOSED ON 23 30 DELIVERY OF NATURAL GAS. 23 31 1. A replacement delivery tax is imposed on every person 23 32 who makes a delivery of natural gas to a consumer within this 23 33 state. The replacement delivery tax imposed by this section 23 34 shall be equal to the sum of the following: 23 35 a. The number of therms of natural gas delivered to 24 1 consumers by the taxpayer within each natural gas competitive 24 2 service area during the tax year multiplied by the natural gas 24 3 delivery tax rate in effect for each such natural gas 24 4 competitive service area. 24 5 b. Where applicable, and in addition to the tax imposed by 24 6 paragraph "a", the number of therms of natural gas delivered 24 7 to consumers by the taxpayer within each natural gas 24 8 competitive service area during the tax year multiplied by the 24 9 municipal natural gas transfer replacement tax rate for each 24 10 such natural gas competitive service area. 24 11 2. If natural gas is consumed in this state, whether such 24 12 natural gas is purchased or transferred, and the delivery, 24 13 purchase, or transference of such natural gas is not subject 24 14 to the tax imposed under subsection 1, a tax is imposed on the 24 15 consumer at the rates prescribed under subsection 1. 24 16 3. Natural gas delivery tax rates shall be calculated by 24 17 the director for each natural gas competitive service area as 24 18 follows: 24 19 a. The director shall determine the average centrally 24 20 assessed property tax liability allocated to natural gas 24 21 service of each taxpayer, other than a municipal utility, 24 22 principally serving a natural gas competitive service area for 24 23 the assessment years 1992 through 1996 based on property tax 24 24 payments made. In the case of a municipal utility, the 24 25 average centrally assessed property tax liability allocated to 24 26 natural gas service is the centrally assessed property tax 24 27 liability of such municipal utility allocated to natural gas 24 28 service for the 1996 assessment year based on property tax 24 29 payments made. For purposes of this subsection, taxpayer does 24 30 not include a pipeline company defined in section 479A.2. 24 31 b. The director shall determine for each taxpayer the 24 32 number of therms of natural gas delivered to consumers which 24 33 would have been subject to taxation under this section in 24 34 calendar year 1997 had this section been in effect for 24 35 calendar year 1997. 25 1 c. The director shall determine a natural gas delivery tax 25 2 rate for each natural gas competitive service area by dividing 25 3 the average centrally assessed property tax liability 25 4 allocated to natural gas service of the taxpayer principally 25 5 serving the natural gas competitive service area by the number 25 6 of therms of natural gas delivered by such taxpayer to 25 7 consumers in calendar year 1997 which would have been subject 25 8 to taxation under this section had such section been in effect 25 9 for calendar year 1997. 25 10 4. Municipal natural gas transfer replacement tax rates 25 11 shall be calculated annually by the city council of each city 25 12 located within a natural gas competitive service area served 25 13 by a municipal utility as of January 1, 1998, by dividing the 25 14 average annual dollar amount of natural gas related transfers 25 15 made pursuant to section 384.89 by the municipal utility 25 16 serving the natural gas competitive service area, other than 25 17 those transfers declared exempt from the transfer replacement 25 18 tax by the city council, plus the municipal transfer 25 19 replacement tax received by the municipality, if any, during 25 20 the five immediately preceding calendar years, by the number 25 21 of therms of natural gas delivered to consumers in the natural 25 22 gas competitive service area during the immediately preceding 25 23 calendar year which were subject to taxation under this 25 24 section or which would have been subject to taxation under 25 25 this section had it been in effect for such calendar year. 25 26 The city council on its own motion, or in the case of a 25 27 municipal utility governed by a board of trustees under 25 28 chapter 388 upon a resolution of the board of trustees 25 29 requesting such action, may declare any transfer or part of 25 30 such transfer to be exempt from the transfer replacement tax 25 31 under this section. Such rates shall be calculated and 25 32 reported to the director on or before August 31 of each tax 25 33 year. 25 34 5. A municipal utility taxpayer is entitled to a credit 25 35 against the municipal natural gas transfer replacement tax 26 1 equal to the average amount of natural gas related transfers 26 2 made by such municipal utility taxpayer under section 384.89, 26 3 other than those transfers declared exempt from transfer 26 4 replacement tax by the city council, during the preceding five 26 5 calendar years. 26 6 6. Notwithstanding subsection 1, the natural gas delivery 26 7 tax rate applied to therms of natural gas delivered by a 26 8 taxpayer to utility property and facilities which are placed 26 9 in service on or after January 1, 1998, and which are owned by 26 10 or leased to and initially served by such taxpayer shall be 26 11 the natural gas delivery tax rate in effect for the natural 26 12 gas competitive service area principally served by such 26 13 utility property and facilities even though such utility 26 14 property and facilities may be physically located in another 26 15 natural gas competitive service area. 26 16 7. Delivery of natural gas to a city from such city's 26 17 municipal utility is not subject to the replacement delivery 26 18 tax imposed under subsection 1, paragraph "a", and subsection 26 19 2, provided such natural gas is used by the city for the 26 20 public purposes of the city. 26 21 Section 437A.5, subsection 2, does not apply to natural gas 26 22 consumed by a person, other than an electric company, natural 26 23 gas company, electric cooperative, or municipal utility, 26 24 acquired by means of facilities owned by or leased to such 26 25 person on January 1, 1998, which were physically attached to 26 26 pipelines that are not permitted pursuant to chapter 479 and 26 27 used by such person for the purpose of bypassing the local 26 28 natural gas company or municipal utility. 26 29 8. If, for any tax year after calendar year 1997, the 26 30 total taxable therms of natural gas required to be reported by 26 31 taxpayers pursuant to section 437A.8, subsection 1, paragraphs 26 32 "a" and "b", with respect to any natural gas competitive 26 33 service area increases or decreases by more than the threshold 26 34 percentage from the average of the base year amounts for that 26 35 natural gas competitive service area during the immediately 27 1 preceding five calendar years, the tax rate imposed under 27 2 subsection 1, paragraph "a", and subsection 2 for that tax 27 3 year shall be recalculated by the director for that natural 27 4 gas competitive service area so that the total of the 27 5 replacement natural gas delivery taxes required to be reported 27 6 pursuant to section 437A.8, subsection 1, paragraph "e", for 27 7 that natural gas competitive service area with respect to the 27 8 tax imposed under subsection 1, paragraph "a", and subsection 27 9 2 shall be as follows: 27 10 a. If the number of therms of natural gas required to be 27 11 reported increased by more than the threshold percentage, one 27 12 hundred two percent of such taxes required to be reported by 27 13 taxpayers for that natural gas competitive service area for 27 14 the immediately preceding tax year. 27 15 b. If the number of therms of natural gas required to be 27 16 reported decreased by more than the threshold percentage, 27 17 ninety-eight percent of such taxes required to be reported by 27 18 taxpayers for that natural gas competitive service area for 27 19 the immediately preceding tax year. 27 20 c. For purposes of paragraphs "a" and "b", in computing 27 21 the tax rate under subsection 1, paragraph "a", and susection 27 22 2 for calendar year 1998, the director shall use the average 27 23 centrally assessed property tax liability allocated to natural 27 24 gas service computed for the natural gas competitive service 27 25 area pursuant to subsection 3, paragraph "a", in lieu of the 27 26 taxes required to be reported for that natural gas competitive 27 27 service area for the immediately preceding tax year. 27 28 The threshold percentage shall be determined annually and 27 29 shall be eight percent for any natural gas competitive service 27 30 area in which the average of the base year amounts for the 27 31 preceding five calendar years does not exceed two hundred 27 32 fifty million therms, and ten percent for all other natural 27 33 gas competitive service areas. 27 34 Recalculation of a natural gas delivery tax rate, if 27 35 required, shall be made and the new rate published in the Iowa 28 1 administrative bulletin by the director by no later than May 28 2 31 following the tax year. The director shall adjust the 28 3 tentative replacement tax imposed by subsection 1, paragraph 28 4 "a", and subsection 2 required to be shown on any affected 28 5 taxpayer's return pursuant to section 437A.8, subsection 1, 28 6 paragraph "e", to reflect the adjusted delivery tax rate for 28 7 the tax year, and report such adjustment to the affected 28 8 taxpayer on or before June 30 following the tax year. The new 28 9 natural gas delivery tax rate shall apply prospectively, until 28 10 such time as further adjustment is required. 28 11 For purposes of this subsection, "base year amount" means 28 12 for calendar years prior to tax year 1998, the sum of the 28 13 therms of natural gas delivered to consumers within a natural 28 14 gas competitive service area by the taxpayer principally 28 15 serving such natural gas competitive service area which would 28 16 have been subject to taxation under this section had this 28 17 section been in effect for those years; and for tax years 28 18 after calendar year 1997, the taxable therms of natural gas 28 19 required to be reported by taxpayers pursuant to section 28 20 437A.8, subsection 1, paragraphs "a" and "b", with respect to 28 21 any natural gas competitive service area. 28 22 9. The natural gas delivery tax rate in effect for each 28 23 natural gas competitive service area shall be published by the 28 24 director in the Iowa administrative bulletin on or before 28 25 November 30, 1998, and annually after that date, during the 28 26 last quarter of the tax year. 28 27 Sec. 7. NEW SECTION. 437A.6 REPLACEMENT TAX IMPOSED ON 28 28 ELECTRIC GENERATION. 28 29 1. A replacement generation tax of six hundredths of a 28 30 cent per kilowatt-hour of electricity generated within this 28 31 state during the tax year is imposed on every person 28 32 generating electricity, except electricity generated by the 28 33 following: 28 34 a. A low capacity factor electric power generating plant. 28 35 b. Facilities owned by or leased to a municipal utility 29 1 when devoted to public use and not held for pecuniary profit, 29 2 except facilities of a municipally owned electric utility held 29 3 under joint ownership or lease and facilities of an electric 29 4 power facility financed under chapter 28F. 29 5 c. Wind energy conversion property subject to section 29 6 427B.26. 29 7 d. Methane gas conversion property subject to section 29 8 427.1, subsection 29. 29 9 e. Facilities owned by or leased to a state university or 29 10 university of science and technology, to the extent 29 11 electricity generated by such facilities is consumed 29 12 exclusively by such state university or university of science 29 13 and technology. 29 14 2. For purposes of this section, if a generation facility 29 15 is jointly owned or leased, the taxpayer shall compute the 29 16 number of kilowatt-hours of electricity subject to the 29 17 replacement generation tax by multiplying the taxpayer's 29 18 percentage interest in the jointly held generation facility by 29 19 the number of kilowatt-hours of electricity generated. 29 20 Sec. 8. NEW SECTION. 437A.7 REPLACEMENT TAX IMPOSED ON 29 21 ELECTRIC TRANSMISSION. 29 22 1. A replacement transmission tax is imposed on every 29 23 person owning or leasing transmission lines within this state 29 24 and shall be equal to the sum of all of the following: 29 25 a. Five hundred fifty dollars per pole mile of 29 26 transmission line owned or leased by the taxpayer not 29 27 exceeding one hundred kilovolts. 29 28 b. Three thousand dollars per pole mile of transmission 29 29 line owned or leased by the taxpayer greater than one hundred 29 30 kilovolts but not exceeding one hundred fifty kilovolts. 29 31 c. Seven hundred dollars per pole mile of transmission 29 32 line owned or leased by the taxpayer greater than one hundred 29 33 fifty kilovolts but not exceeding three hundred kilovolts. 29 34 d. Seven thousand dollars per pole mile of transmission 29 35 line owned or leased by the taxpayer greater than three 30 1 hundred kilovolts. 30 2 The replacement transmission tax shall be calculated on the 30 3 basis of pole miles of transmission line owned or leased by 30 4 the taxpayer on the last day of the tax year. 30 5 2. The following shall not be subject to the replacement 30 6 transmission tax: 30 7 a. Transmission lines owned by or leased to a municipal 30 8 utility when devoted to public use and not for pecuniary 30 9 profit, except transmission lines of a municipally owned 30 10 electric utility held under joint ownership and transmission 30 11 lines of an electric power facility financed under chapter 30 12 28F. 30 13 b. Transmission lines owned by or leased to a lessor when 30 14 the lessee or sublessee of such transmission lines is subject 30 15 to the replacement transmission tax. 30 16 c. Any electric cooperative which owns, leases, or owns 30 17 and leases in total more than fifty pole miles and less than 30 18 seven hundred fifty pole miles of transmission lines in this 30 19 state. Chapter 437 shall apply to such electric cooperatives. 30 20 d. Transmission lines owned by or leased to a state 30 21 university or university of science and technology, provided 30 22 such transmission lines are used exclusively for the 30 23 transmission of electricity consumed by such state university 30 24 or university of science and technology. 30 25 e. Transmission lines owned by or leased to a person, 30 26 other than a public utility, for which a franchise is not 30 27 required under chapter 478. 30 28 3. For purposes of this section, if a transmission line is 30 29 jointly owned or leased, the taxpayer shall compute the number 30 30 of pole miles subject to the replacement transmission tax by 30 31 multiplying the taxpayer's percentage interest in the jointly 30 32 held transmission lines by the number of pole miles of such 30 33 lines. 30 34 Sec. 9. NEW SECTION. 437A.8 RETURN AND PAYMENT 30 35 REQUIREMENTS – RATE ADJUSTMENTS. 31 1 1. Each taxpayer, on or before February 28 following a tax 31 2 year, shall file with the director a return including, but not 31 3 limited to, the following information: 31 4 a. The total taxable kilowatt-hours of electricity 31 5 delivered by the taxpayer to consumers within each electric 31 6 competitive service area during the tax year, and the total 31 7 taxable therms of natural gas delivered by the taxpayer to 31 8 consumers within each natural gas competitive service area 31 9 during the tax year. 31 10 b. The total kilowatt-hours of electricity consumed by the 31 11 taxpayer within each electric competitive service area during 31 12 the tax year subject to tax under section 437A.4, subsection 31 13 2, and the total therms of natural gas consumed by the 31 14 taxpayer within each natural gas competitive service area 31 15 during the tax year subject to tax under section 437A.5, 31 16 subsection 2. 31 17 c. The total taxable kilowatt-hours of electricity 31 18 generated by the taxpayer in Iowa during the tax year. 31 19 d. The total taxable pole miles of electric transmission 31 20 lines in Iowa, by kilovolt, owned or leased by the taxpayer on 31 21 the last day of the tax year. 31 22 e. The tentative replacement taxes imposed by section 31 23 437A.4, subsection 1, paragraph "a", section 437A.4, 31 24 subsection 2, section 437A.5, subsection 1, paragraph "a", 31 25 section 437A.5, subsection 2, and sections 437A.6 and 437A.7, 31 26 due for the tax year. 31 27 f. For purposes of a municipal utility which is a member 31 28 of a municipal electric cooperative association, the 31 29 occurrence during the preceding calendar year of an event 31 30 described in section 437A.4, subsection 9, paragraph "a" or 31 31 "b". 31 32 2. Each taxpayer subject to a municipal transfer 31 33 replacement tax, on or before February 28 following a tax 31 34 year, shall file with the chief financial officer of each city 31 35 located within an electric or natural gas competitive service 32 1 area served by a municipal utility as of January 1, 1998, a 32 2 return including, but not limited to, the following 32 3 information: 32 4 a. The total taxable kilowatt-hours of electricity 32 5 delivered by the taxpayer within each electric competitive 32 6 service area described in section 437A.4, subsection 4, during 32 7 the tax year and the total taxable therms of natural gas 32 8 delivered by the taxpayer within each natural gas competitive 32 9 service area described in section 437A.5, subsection 4, during 32 10 the tax year. 32 11 b. For a municipal utility taxpayer, the total transfers 32 12 made by the taxpayer under section 384.89 within each 32 13 competitive service area during the preceding calendar year, 32 14 allocated between electric-related transfers and natural gas- 32 15 related transfers and total credits described in sections 32 16 437A.4, subsection 5, and 437A.5, subsection 5. 32 17 c. The transfer replacement taxes imposed by sections 32 18 437A.4, subsection 1, paragraph "b", and 437A.5, subsection 1, 32 19 paragraph "b", due for the tax year. 32 20 3. A return shall be signed by an officer, or other person 32 21 duly authorized by the taxpayer, and must be certified as 32 22 correct and in accordance with forms and rules prescribed by 32 23 the director in the case of a return filed pursuant to 32 24 subsection 1, and in accordance with forms and rules 32 25 prescribed by the chief financial officer of the city in the 32 26 case of a return filed pursuant to subsection 2. 32 27 4. At the time of filing the return required by subsection 32 28 1 with the director, the taxpayer shall calculate the 32 29 tentative replacement tax due for the tax year. The director 32 30 shall compute any adjustments to the replacement tax required 32 31 by subsections 7 and 8 and by section 437A.4, subsection 8, 32 32 and section 437A.5, subsection 8, and notify the taxpayer of 32 33 any such adjustments in accordance with the requirements of 32 34 such provisions. The director and the department of 32 35 management shall compute the allocation of replacement taxes 33 1 among local taxing districts and report such allocations to 33 2 county treasurers pursuant to section 437A.15. Based on such 33 3 allocations, the treasurer of each county shall notify each 33 4 taxpayer on or before August 31 following a tax year of its 33 5 replacement tax obligation to the county treasurer. On or 33 6 before September 30, 1999, and on or before September 30 of 33 7 each subsequent year, the taxpayer shall remit to the county 33 8 treasurer of each county to which such replacement tax is 33 9 allocated pursuant to section 437A.15, one-half of the 33 10 replacement tax so allocated, and on or before the succeeding 33 11 March 31, the taxpayer shall remit to the county treasurers 33 12 the remaining replacement tax so allocated. If notification 33 13 of a taxpayer's replacement tax obligation is not mailed by a 33 14 county treasurer on or before August 31 following a tax year, 33 15 such taxpayer shall have thirty days from the date the 33 16 notification is mailed to remit one-half of the replacement 33 17 tax otherwise required by this subsection to be remitted to 33 18 such county treasurer on or before September 30. If a 33 19 taxpayer fails to timely remit replacement taxes as provided 33 20 in this subsection, the county treasurer of each affected 33 21 county shall notify the director of such failure. 33 22 5. At the time of filing the return required by subsection 33 23 2, the taxpayer shall calculate the municipal transfer 33 24 replacement tax due for the tax year. Municipal transfer 33 25 replacement taxes shall be paid to the chief financial officer 33 26 of the city to which the taxes are allocated at such time and 33 27 place as directed by the city council. 33 28 6. Notwithstanding subsections 1 through 5, a taxpayer 33 29 shall not be required to file a return otherwise required by 33 30 this section or remit any replacement tax for any tax year in 33 31 which the taxpayer's replacement tax liability before credits 33 32 is three hundred dollars or less. 33 33 7. Following the determination of electric and natural gas 33 34 delivery tax rates by the director pursuant to section 437A.4, 33 35 subsection 3, and section 437A.5, subsection 3, if an 34 1 adjustment resulting from a taxpayer appeal is made to taxes 34 2 levied and paid by a taxpayer with respect to any of the 34 3 assessment years 1992 through 1996 used in determining such 34 4 rates, the director shall recalculate the delivery tax rate 34 5 for any affected electric or natural gas competitive service 34 6 area to reflect the impact of such adjustment as if such 34 7 adjustment had been reflected in the initial determination of 34 8 average centrally assessed property tax liability allocated to 34 9 electric or natural gas service pursuant to section 437A.4, 34 10 subsection 3, paragraph "a", and section 437A.5, subsection 3, 34 11 paragraph "a". Rate recalculations shall be made and 34 12 published in the Iowa administrative bulletin by the director 34 13 on or before March 31 following the calendar year in which a 34 14 final determination of the adjustment is made. Taxpayers 34 15 shall report to the director any increase or decrease in the 34 16 tentative replacement tax required to be shown to be due 34 17 pursuant to subsection 1, paragraph "e", for any tax year with 34 18 the return for the year in which the recalculated tax rates 34 19 which gave rise to the adjustment are published in the Iowa 34 20 administrative bulletin. The director and the department of 34 21 management shall redetermine the allocation of replacement 34 22 taxes pursuant to section 437A.15 for each affected tax year. 34 23 If a taxpayer has overpaid replacement taxes, the overpayment 34 24 shall be reported by the director to such taxpayer and to the 34 25 appropriate county treasurers and shall be a credit against 34 26 the replacement taxes owed by such taxpayer for the year in 34 27 which the recalculated rates which gave rise to the 34 28 overpayment are published in the Iowa administrative bulletin. 34 29 If a taxpayer has overpaid centrally assessed property taxes 34 30 for assessment years prior to tax year 1998, such overpayment 34 31 shall be a credit against replacement taxes owed by such 34 32 taxpayer for the year in which the overpayment is determined. 34 33 Unused credits may be carried forward and used to reduce 34 34 future replacement tax liabilities until exhausted. 34 35 8. If, following the determination of electric delivery 35 1 tax rates by the director pursuant to section 437A.4, 35 2 subsection 3, an adjustment resulting from a taxpayer appeal 35 3 is made to the value of the property of a generation and 35 4 transmission electric cooperative for the assessment year 35 5 1997, the director shall recalculate the delivery tax rate for 35 6 any affected electric competitive service area by reducing the 35 7 base year assessed value of the property by the amount of the 35 8 adjustment for the assessment year 1997 and as if such 35 9 adjustment had been reflected in the initial determination of 35 10 average centrally assessed property tax liability allocated to 35 11 electric service in section 437A.4, subsection 3, paragraph 35 12 "a". Rate recalculations shall be made and published in the 35 13 Iowa administrative bulletin by the director on or before 35 14 March 31 following the calendar year in which a final 35 15 determination of the adjustment is made. Taxpayers shall 35 16 report to the director any increase or decrease in the 35 17 tentative replacement tax required to be shown to be due 35 18 pursuant to subsection 1, paragraph "e", for any tax year with 35 19 the return for the year in which the recalculated tax rates 35 20 which gave rise to the adjustment are published in the Iowa 35 21 administrative bulletin. The director and the department of 35 22 management shall redetermine the allocation of replacement 35 23 taxes pursuant to section 437A.15 for each affected tax year. 35 24 If a taxpayer has overpaid replacement taxes, such overpayment 35 25 shall be reported by the director to such taxpayer and to the 35 26 appropriate county treasurers and such overpayment shall be a 35 27 credit against the replacement taxes owed by such taxpayer for 35 28 the year in which the recalculated rates which gave rise to 35 29 the overpayment are published in the Iowa administrative 35 30 bulletin. If a taxpayer has overpaid centrally assessed 35 31 property taxes for the 1997 assessment year, such overpayment 35 32 shall be a credit against replacement taxes owed by such 35 33 taxpayer for the year in which the overpayment is determined. 35 34 Unused credits may be carried forward and reduce future 35 35 replacement tax liabilities until exhausted. 36 1 Sec. 10. NEW SECTION. 437A.9 FAILURE TO FILE RETURN – 36 2 INCORRECT RETURN. 36 3 1. As soon as practicable after a return required by 36 4 section 437A.8, subsection 1, is filed, and in any event 36 5 within three years after such return is filed, the director 36 6 shall examine the return, determine the tax due if the return 36 7 is found to be incorrect, and give notice to the taxpayer of 36 8 the determination as provided in subsection 2. The period for 36 9 the examination and determination of the correct amount of tax 36 10 is unlimited in the case of a false or fraudulent return made 36 11 with the intent to evade any tax or in the case of a failure 36 12 to file a return. The chief financial officer of a city shall 36 13 have the same authority as is granted to the director under 36 14 this section with respect to a return filed pursuant to 36 15 section 437A.8, subsection 2. 36 16 2. If a return required by section 437.8, subsection 1, is 36 17 not filed, or if such return when filed is incorrect or 36 18 insufficient and the taxpayer fails to file a corrected or 36 19 sufficient return within twenty days after such return is 36 20 required by notice from the director, the director shall 36 21 determine the amount of tax due from information as the 36 22 director may be able to obtain and, if necessary, may estimate 36 23 the tax due on the basis of external indices. The director 36 24 shall give notice of the determination to the taxpayer liable 36 25 for the tax and to the county treasurers to whom the tax is 36 26 owed. The determination shall fix the tax unless the taxpayer 36 27 against whom it is levied, within sixty days after notice of 36 28 the determination, applies to the director for a hearing. At 36 29 the hearing evidence may be offered to support the 36 30 determination or to prove that it is incorrect. After the 36 31 hearing the director shall give notice of the decision to the 36 32 person liable for the tax and to the county treasurers to whom 36 33 the tax is owed. 36 34 3. The three-year period of limitation provided in 36 35 subsection 1 may be extended by the taxpayer by signing a 37 1 waiver agreement form provided by the department. The 37 2 agreement shall stipulate the period of extension and the tax 37 3 period to which the extension applies. The agreement shall 37 4 also provide that a claim for refund may be filed by the 37 5 taxpayer at any time during the period of extension. 37 6 Sec. 11. NEW SECTION. 437A.10 JUDICIAL REVIEW. 37 7 1. Judicial review of the actions of the director may be 37 8 sought pursuant to chapter 17A, the Iowa administrative 37 9 procedure Act. 37 10 2. For cause and upon a showing by the director that 37 11 collection of the tax in dispute is in doubt, the court may 37 12 order the petitioner to file with the clerk of the district 37 13 court a bond for the use of the appropriate local taxing 37 14 districts, with sureties approved by the clerk of the district 37 15 court, in the amount of the tax appealed from, conditioned 37 16 upon the performance by the petitioner of any orders of the 37 17 court. 37 18 3. An appeal may be taken by the taxpayer or the director 37 19 to the supreme court irrespective of the amount involved. 37 20 4. A person aggrieved by a decision of the chief financial 37 21 officer of a city under this chapter may seek review by writ 37 22 of certiorari within thirty days of the decision sought to be 37 23 reviewed. 37 24 Sec. 12. NEW SECTION. 437A.11 LIEN – ACTIONS 37 25 AUTHORIZED. 37 26 Whenever a taxpayer who is liable to pay a tax imposed by 37 27 subchapter 2 refuses or neglects to pay such tax, the amount, 37 28 including any interest, penalty, or addition to such tax, 37 29 together with the costs that may accrue, shall be a lien in 37 30 favor of the chief financial officer of the city or the county 37 31 treasurer to which the tax is owed upon all property and 37 32 rights to property, whether real or personal, belonging to the 37 33 taxpayer. The lien shall be prior to and superior over all 37 34 subsequent liens upon any personal property within this state, 37 35 or right to such personal property, belonging to the taxpayer, 38 1 without the necessity of recording the lien. The requirement 38 2 for recording, as applied to the tax imposed by subchapter 2, 38 3 shall apply only to a lien upon real property. The lien may 38 4 be preserved against subsequent mortgagees, purchasers, or 38 5 judgment creditors, for value and without notice of the lien, 38 6 on any real property situated in a county, by the county 38 7 treasurer to which replacement tax is owed by filing with the 38 8 recorder of the county in which the real property is located a 38 9 notice of the lien. For purposes of the replacement tax 38 10 collected by a city, the lien may be preserved against 38 11 subsequent mortgagees, purchasers, or judgment creditors, for 38 12 value and without notice of the lien, on any real property 38 13 situated in the county, by the chief financial officer of the 38 14 city to which replacement tax is owed by filing with the 38 15 recorder of the county in which the real property is located a 38 16 notice of the lien. 38 17 The county recorder of each county shall prepare and keep 38 18 in the recorder's office a book to be known as the index of 38 19 replacement tax liens, so ruled as to show in appropriate 38 20 columns under the names of taxpayers arranged alphabetically, 38 21 all of the following: 38 22 1. The name of the taxpayer. 38 23 2. The name of the county treasurer and county or the name 38 24 of the chief financial officer and city as claimant. 38 25 3. Time the notice of lien was received. 38 26 4. Date of notice. 38 27 5. Amount of lien then due. 38 28 6. Date of assessment. 38 29 7. Date when the lien is satisfied. 38 30 The recorder shall endorse on each notice of lien the day, 38 31 hour, and minute when received and preserve such notice, and 38 32 shall promptly record the lien in the manner provided for 38 33 recording real estate mortgages. The lien is effective from 38 34 the time of the indexing of the lien. 38 35 The county treasurer or chief financial officer of the city 39 1 shall pay a recording fee as provided in section 331.604, for 39 2 the recording of the lien, or for its satisfaction. 39 3 Upon the payment of the replacement tax as to which a 39 4 county treasurer or chief financial officer of a city has 39 5 filed notice with a county recorder, the county treasurer or 39 6 chief financial officer of the city shall promptly file with 39 7 the recorder a satisfaction of the replacement tax. The 39 8 recorder shall enter the satisfaction on the notice on file in 39 9 the recorder's office and indicate that fact on the index. 39 10 Section 445.3 applies with respect to the replacement taxes 39 11 and penalties imposed by this chapter, except for the 39 12 provisions limiting the commencement of actions. 39 13 Sec. 13. NEW SECTION. 437A.12 SERVICE OF NOTICE. 39 14 1. A notice authorized or required under this chapter may 39 15 be given by mailing the notice to the taxpayer, addressed to 39 16 the taxpayer at the address given in the last return filed by 39 17 the taxpayer pursuant to this chapter, or if no return has 39 18 been filed, then to the most recent address of the taxpayer 39 19 obtainable. The mailing of the notice is presumptive evidence 39 20 of the receipt of the notice by the taxpayer to whom the 39 21 notice is addressed. A period of time within which some 39 22 action must be taken for which notice is provided under this 39 23 section commences to run from the date of mailing of the 39 24 notice. 39 25 2. There is no limitation for the enforcement of a civil 39 26 remedy pursuant to any proceeding or action taken to levy, 39 27 appraise, assess, determine, or enforce the collection of any 39 28 tax or penalty due under this chapter. 39 29 Sec. 14. NEW SECTION. 437A.13 PENALTIES – OFFENSES – 39 30 LIMITATION. 39 31 1. A taxpayer is subject to the penalty provisions in 39 32 section 421.27 with respect to any replacement tax due under 39 33 this chapter. A taxpayer shall also pay interest on the 39 34 delinquent replacement tax at the rate in effect under section 39 35 421.7 for each month computed from the date the payment was 40 1 due, counting each fraction of a month as an entire month. 40 2 The penalty and interest shall be paid to the county 40 3 treasurer, or in the case of penalty and interest associated 40 4 with a municipal transfer replacement tax to the city 40 5 financial officer, and shall be disposed of in the same manner 40 6 as other receipts under this chapter. Unpaid penalties and 40 7 interest may be enforced in the same manner as provided for 40 8 unpaid replacement tax under this chapter. 40 9 2. A taxpayer, or officer, member, or employee of the 40 10 taxpayer, who willfully attempts to evade the replacement tax 40 11 imposed or the payment of the replacement tax is guilty of a 40 12 class "D" felony. 40 13 3. The issuance of a certificate by the director or a 40 14 county treasurer stating that a replacement tax has not been 40 15 paid, that a return has not been filed, or that information 40 16 has not been supplied pursuant to this chapter is prima facie 40 17 evidence of such failure. 40 18 4. A taxpayer, or officer, member, or employee of the 40 19 taxpayer, required to pay a replacement tax, or required to 40 20 make, sign, or file an annual return or supplemental return, 40 21 who willfully makes a false or fraudulent annual return, or 40 22 who willfully fails to pay at least ninety percent of the 40 23 replacement tax or willfully fails to make, sign, or file the 40 24 annual return, as required, is guilty of a fraudulent 40 25 practice. 40 26 5. For purposes of determining the place of trial for a 40 27 violation of this section, the situs of an offense is in the 40 28 county of the residence of the taxpayer, officer, member, or 40 29 employee of the taxpayer charged with the offense, unless the 40 30 taxpayer, officer, member, or employee of the taxpayer is a 40 31 nonresident of this state or the residence cannot be 40 32 established, in which event the situs of the offense is in 40 33 Polk county. 40 34 6. Prosecution for an offense specified in this section 40 35 shall be commenced within six years after the commission of 41 1 the offense. 41 2 Sec. 15. NEW SECTION. 437A.14 CORRECTION OF ERRORS – 41 3 REFUNDS OR CREDITS OF REPLACEMENT TAX PAID – INFORMATION 41 4 CONFIDENTIAL – PENALTY. 41 5 1. a. If an amount of replacement tax, penalty, or 41 6 interest has been paid which was not due under this chapter, a 41 7 city's chief financial officer or county treasurer to whom 41 8 such erroneous payment was made shall do one of the following: 41 9 (1) Credit the amount of the erroneous payment against any 41 10 replacement tax due, or to become due, from the taxpayer on 41 11 the books of the city or county. 41 12 (2) Refund the amount of the erroneous payment to the 41 13 taxpayer. 41 14 b. Claims for refund or credit of replacement taxes paid 41 15 shall be filed with the director. A claim for refund or 41 16 credit that is not filed with the director within three years 41 17 after the replacement tax payment upon which a refund or 41 18 credit is claimed became due, or one year after the 41 19 replacement tax payment was made, whichever time is later, 41 20 shall not be allowed. A claim for refund or credit of tax 41 21 alleged to be unconstitutional not filed with the director 41 22 within ninety days after the replacement tax payment upon 41 23 which a refund or credit is claimed became due shall not be 41 24 allowed. As a precondition for claiming a refund or credit of 41 25 alleged unconstitutional taxes, such taxes must be paid under 41 26 written protest which specifies the particulars of the alleged 41 27 unconstitutionality. Claims for refund or credit may only be 41 28 made by, and refunds or credits may only be made to, the 41 29 person responsible for paying the replacement tax, or such 41 30 person's successors. The director shall notify affected 41 31 county treasurers of the acceptance or denial of any refund 41 32 claim. Section 421.10 applies to claims denied by the 41 33 director. 41 34 2. It is unlawful for any present or former officer or 41 35 employee of the state to divulge or to make known in any 42 1 manner to any person the kilowatt-hours of electricity or 42 2 therms of natural gas delivered by a taxpayer in a competitive 42 3 service area disclosed on a tax return, return information, or 42 4 investigative or audit information. A person who violates 42 5 this section is guilty of a serious misdemeanor. If the 42 6 offender is an officer or employee of the state, such person, 42 7 in addition to any other penalty, shall also be dismissed from 42 8 office or discharged from employment. This section does not 42 9 prohibit turning over to duly authorized officers of the 42 10 United States or tax officials of other states such kilowatt- 42 11 hours or therms pursuant to agreement between the director and 42 12 the secretary of the treasury of the United States or the 42 13 secretary's delegate or pursuant to a reciprocal agreement 42 14 with another state. 42 15 3. Unless otherwise expressly permitted by a section 42 16 referencing this chapter, the kilowatt-hours of electricity or 42 17 therms of natural gas delivered by a taxpayer in a competitive 42 18 service area shall not be divulged to any person or entity, 42 19 other than the taxpayer, the department, or the internal 42 20 revenue service for use in a matter unrelated to tax 42 21 administration. 42 22 This prohibition precludes persons or entities other than 42 23 the taxpayer, the department, or the internal revenue service 42 24 from obtaining such information from the department. A 42 25 subpoena, order, or process which requires the department to 42 26 produce such information to a person or entity, other than the 42 27 taxpayer, the department, or internal revenue service, for use 42 28 in a nontax proceeding is void. 42 29 4. Notwithstanding subsections 2 and 3, the chief 42 30 financial officer of any local taxing district and any 42 31 designee of such officer shall have access to any computations 42 32 made by the director pursuant to the provisions of this 42 33 chapter, and any tax return or other information used by the 42 34 director in making such computations, which affect the 42 35 replacement tax owed by any such taxpayer. 43 1 5. Local taxing district employees are deemed to be 43 2 officers and employees of the state for purposes of subsection 43 3 2. 43 4 6. Claims for refund or credit of municipal transfer 43 5 replacement tax shall be filed with the appropriate city's 43 6 chief financial officer. Subsection 1 applies with respect to 43 7 the transfer replacement tax and the city's chief financial 43 8 officer shall have the same authority as is granted to the 43 9 director under this section with respect to a return filed 43 10 pursuant to section 437A.8, subsection 2. 43 11 Sec. 16. NEW SECTION. 437A.15 ALLOCATION OF REVENUE. 43 12 1. The director and the department of management shall 43 13 compute the allocation of all replacement tax revenues other 43 14 than transfer replacement tax revenues among the local taxing 43 15 districts in accordance with this section and shall report 43 16 such allocation by local taxing districts to the county 43 17 treasurers on or before August 15 following a tax year. 43 18 2. The director shall determine and report to the 43 19 department of management the total replacement taxes to be 43 20 collected from each taxpayer for the tax year on or before 43 21 July 30 following such tax year. 43 22 3. All replacement taxes owed by a taxpayer shall be 43 23 allocated among the local taxing districts in which such 43 24 taxpayer's property is located in accordance with a general 43 25 allocation formula determined by the department of management 43 26 on the basis of general property tax equivalents. General 43 27 property tax equivalents shall be determined by applying the 43 28 levy rates reported by each local taxing district to the 43 29 department of management on or before June 30 following a tax 43 30 year to the assessed value of taxpayer property allocated to 43 31 each such local taxing district as adjusted and reported to 43 32 the department of management in such tax year by the director 43 33 pursuant to section 437A.20, subsection 2. The general 43 34 allocation formula for a tax year shall allocate to each local 43 35 taxing district that portion of the replacement taxes owed by 44 1 each taxpayer which bears the same ratio as such taxpayer's 44 2 general property tax equivalents for each local taxing 44 3 district bears to such taxpayer's total general property tax 44 4 equivalents for all local taxing districts in Iowa. 44 5 4. On or before August 31 following tax years 1998, 1999, 44 6 and 2000, each county treasurer shall compute a special 44 7 utility property tax levy or tax credit for each taxpayer for 44 8 which a replacement tax liability for each such tax year is 44 9 reported to the county treasurer pursuant to subsection 1. 44 10 The amount of the special utility property tax levy or credit 44 11 shall be determined for each taxpayer by the county treasurer 44 12 by comparing the taxpayer's total replacement tax liability 44 13 allocated to taxing districts in the county pursuant to this 44 14 section with the anticipated tax revenues from the taxpayer. 44 15 If the taxpayer's total replacement tax liability allocated to 44 16 taxing districts in the county is less than the anticipated 44 17 tax revenues from the taxpayer, the county treasurer shall 44 18 levy a special utility property tax equal to the shortfall 44 19 which shall be added to and collected with the replacement tax 44 20 owed by the taxpayer to the county treasurer for the tax year 44 21 pursuant to section 437A.8, subsection 4. If the taxpayer's 44 22 total replacement tax liability allocated to taxing districts 44 23 in the county exceeds the anticipated tax revenues from the 44 24 taxpayer, the county treasurer shall issue a credit to the 44 25 taxpayer which shall be applied to reduce the taxpayer's 44 26 replacement tax liability to the county treasurer for the tax 44 27 year. If the taxpayer's total replacement tax liability 44 28 allocated to taxing districts in the county equals the 44 29 anticipated tax revenues from the taxpayer, no levy or credit 44 30 is required. For each county, the "anticipated tax revenues 44 31 from a taxpayer" means the product of the consolidated levies 44 32 of all taxing districts in the county and the value of 44 33 taxpayer property allocated to the taxing districts in the 44 34 county and reported to the county auditor during the tax year 44 35 pursuant to section 437A.19, subsection 2. Special utility 45 1 property tax levies and credits shall be treated as 45 2 replacement taxes for purposes of section 437A.11 and section 45 3 437A.14, subsection 1, except that any refund claim shall be 45 4 filed with the county treasurer. 45 5 5. The replacement tax, as adjusted by any special utility 45 6 property tax levy or credit and remitted to a county treasurer 45 7 by each taxpayer, shall be treated as a property tax when 45 8 received and shall be disposed of by the county treasurer as 45 9 taxes on real estate. Notwithstanding the allocation 45 10 provisions of this section, nothing in this section shall deny 45 11 any affected taxing entity, as defined in section 403.17, 45 12 subsection 1, which has enacted an ordinance or entered into 45 13 an agreement for the division and allocation of taxes 45 14 authorized under section 403.19 and under which ordinance or 45 15 agreement the taxes collected in respect of properties owned 45 16 by any of the taxpayers remitting replacement taxes pursuant 45 17 to the provisions of this chapter are being divided and 45 18 allocated, the right to receive its share of the replacement 45 19 tax revenues collected for any year which would otherwise be 45 20 paid to such affected taxing entity under the terms of any 45 21 such ordinance or agreement had this chapter not been enacted. 45 22 To the extent that adjustment must be made to the allocation 45 23 described in this section to give effect to the terms of such 45 24 ordinances or agreements, the department of management and the 45 25 county treasurer shall make such adjustments. 45 26 6. In lieu of the adjustment provided for in subsection 5, 45 27 the assessed value of property described in section 403.19, 45 28 subsection 1, may be reduced by the city or county by the 45 29 amount of the taxable value of the property described in 45 30 section 437A.16 included in such area on January 1, 1996, 45 31 pursuant to amendment of the ordinance adopted by such city or 45 32 county pursuant to section 403.19. 45 33 7. On or before January 1, 1999, the department of 45 34 management, in consultation with the department of revenue and 45 35 finance, shall initiate and coordinate the establishment of a 46 1 task force and provide staffing assistance to the task force. 46 2 It is the intent of the general assembly that the task force 46 3 include representatives of the department of management, 46 4 department of revenue and finance, electric companies, natural 46 5 gas companies, municipal utilities, electric cooperatives, 46 6 counties, cities, school boards, and other appropriate 46 7 stakeholders. 46 8 The task force shall study the effects of the replacement 46 9 tax on local taxing districts and taxpayers and the department 46 10 of management shall report to the general assembly by January 46 11 1, 2002, the results of the study. 46 12 Sec. 17. NEW SECTION. 437A.16 ASSESSMENT EXCLUSIVE. 46 13 All operating property and all other property that is 46 14 primarily and directly used in the production, generation, 46 15 transmission, or delivery of electricity or natural gas owned 46 16 by or leased to a person subject to taxation under this 46 17 chapter is exempt from taxation except as otherwise provided 46 18 by this chapter. This exemption shall not extend to taxes 46 19 imposed under chapters 437, 438, and 468, taxpayers described 46 20 in section 437A.8, subsection 6, or facilities or property 46 21 described in section 437A.6, subsection 1, paragraphs "a" 46 22 through "e", and section 437A.7, subsection 2. 46 23 Sec. 18. NEW SECTION. 437A.17 STATUTES APPLICABLE – 46 24 RATE CALCULATIONS. 46 25 1. The director shall administer and enforce the 46 26 replacement tax imposed by this chapter in the same manner as 46 27 provided in and subject to sections 422.68, 422.70, 422.71, 46 28 and 422.75. 46 29 2. The calculation of tax rates and adjustments to such 46 30 rates by the director pursuant to this chapter do not 46 31 constitute rulemaking subject to the provisions of chapter 46 32 17A. 46 33 SUBCHAPTER 3 46 34 STATEWIDE PROPERTY TAX 46 35 Sec. 19. NEW SECTION. 437A.18 TAX IMPOSITION. 47 1 An annual statewide property tax of three cents per one 47 2 thousand dollars of assessed value is imposed upon all 47 3 property described in section 437A.16 on the assessment date 47 4 of January 1. 47 5 Sec. 20. NEW SECTION. 437A.19 ADJUSTMENT TO ASSESSED 47 6 VALUE – REPORTING REQUIREMENTS. 47 7 1. a. A taxpayer whose property is subject to the 47 8 statewide property tax shall report to the director by July 1, 47 9 1998, and by May 1 of each subsequent tax year, on forms 47 10 prescribed by the director, the book value, as of the 47 11 beginning and end of the preceding calendar year, of all of 47 12 the following: 47 13 (1) The local amount of any major addition by local taxing 47 14 district. 47 15 (2) The statewide amount of any major addition without 47 16 notation of location. 47 17 (3) Any building in Iowa at acquisition cost of more than 47 18 ten million dollars which was originally placed in service by 47 19 the taxpayer prior to January 1, 1997, and which was 47 20 transferred or disposed of in the preceding calendar year, 47 21 without notation of location. 47 22 (4) Any electric power generating plant in Iowa at 47 23 acquisition cost of more than ten million dollars which was 47 24 originally placed in service by the taxpayer prior to January 47 25 1, 1997, and which was transferred or disposed of in the 47 26 preceding calendar year, without notation of location. 47 27 (5) All other taxpayer property without notation of 47 28 location. 47 29 (6) The local amount of any major addition eligible for 47 30 the urban revitalization exemption provided for in chapter 47 31 404, by situs. 47 32 b. For purposes of this section: 47 33 (1) "Book value" means cost less accumulated depreciation 47 34 determined under generally accepted accounting principles. 47 35 (2) "Taxpayer property" means property described in 48 1 section 437A.16. 48 2 (3) "To dispose of" means to sell, abandon, decommission, 48 3 or retire an asset. 48 4 (4) "Transfer" means a transaction which results in a 48 5 change of ownership of taxpayer property and includes a 48 6 capital lease transaction. 48 7 c. For purposes of this subsection, "taxpayer" includes a 48 8 person who would have been a taxpayer in calendar year 1997 48 9 had the provisions of this chapter been in effect for the 1997 48 10 assessment year. 48 11 d. If a taxpayer owns or leases pursuant to a capital 48 12 lease less than the entire interest in a major addition, the 48 13 local amount and statewide amount, if any, of such major 48 14 addition shall be apportioned to the taxpayer on the basis of 48 15 its percentage interest in such major addition. 48 16 2. Beginning January 1, 1998, the assessed value of 48 17 taxpayer property shall be adjusted annually as provided in 48 18 this section. The director, with respect to each taxpayer, 48 19 shall do all of the following: 48 20 a. Adjust the assessed value of taxpayer property in each 48 21 local taxing district by the change in book value during the 48 22 preceding calendar year of the local amount of any major 48 23 addition reported within such local taxing district. 48 24 b. Adjust the assessed value of taxpayer property in each 48 25 local taxing district by allocating the change in book value 48 26 during the preceding calendar year of the statewide amount and 48 27 all other taxpayer property described in subsection 1, 48 28 paragraph "a", subparagraph (5), to the assessed value of all 48 29 taxpayer property in the state pro rata according to its 48 30 preadjustment value. 48 31 c. In the case of taxpayer property described in 48 32 subsection 1, paragraph "a", subparagraphs (3) and (4), 48 33 decrease the assessed value of taxpayer property in each local 48 34 taxing district by the taxable value of such property within 48 35 each such local taxing district on January 1, 1997. 49 1 d. In the event of a merger or consolidation of two or 49 2 more taxpayers, to determine the assessed value of the 49 3 surviving taxpayer, combine the assessed values of such 49 4 taxpayers immediately prior to the merger or consolidation. 49 5 e. In the event any taxpayer property is eligible for the 49 6 urban revitalization tax exemption described in chapter 404, 49 7 adjust the assessed value of taxpayer property within each 49 8 affected local taxing district to reflect such exemption. 49 9 f. In the event the base year assessed value of taxpayer 49 10 property is adjusted as a result of taxpayer appeals, reduce 49 11 the assessed value of taxpayer property in each local taxing 49 12 district to reflect such adjustment. The adjustment shall be 49 13 allocated in proportion to the allocation of the taxpayer's 49 14 assessed value among the local taxing districts determined 49 15 without regard to this adjustment. If an adjustment to the 49 16 base year assessed value of taxpayer property is finally 49 17 determined on or before September 30, 1998, it shall be 49 18 reflected in the January 1, 1998, assessed value. Otherwise, 49 19 any such adjustment shall be made as of January 1 of the year 49 20 following the date on which the adjustment is finally 49 21 determined. 49 22 g. In the event the January 1, 1997, assessed value of the 49 23 property of a generation and transmission electric cooperative 49 24 is adjusted as a result of taxpayer appeals, reduce the base 49 25 year assessed value of taxpayer property by the amount of the 49 26 adjustment for the assessment year 1997 in each local taxing 49 27 district to reflect such adjustment. The adjustment shall be 49 28 allocated in proportion to the allocation of the taxpayer's 49 29 assessed value among the local taxing districts determined 49 30 without regard to this adjustment. If an adjustment to the 49 31 base year assessed value of taxpayer property is finally 49 32 determined on or before September 30, 1998, such adjustment 49 33 shall be reflected in the January 1, 1998, assessed value. 49 34 Otherwise, any such adjustment shall be made as of January 1 49 35 of the year following the date on which the adjustment is 50 1 finally determined. 50 2 In no event shall the adjustments set forth in this 50 3 subsection reduce the assessed value of taxpayer property in 50 4 any local taxing district below zero. 50 5 The director, on or before October 31, 1998, in the case of 50 6 January 1, 1998, assessed values, and on or before August 31 50 7 of each subsequent assessment year, shall report to the 50 8 department of management and to the auditor of each county the 50 9 adjusted assessed value of taxpayer property as of January 1 50 10 of such assessment year for each local taxing district. For 50 11 purposes of this subsection, the assessed value of taxpayer 50 12 property in each local taxing district subject to adjustment 50 13 under this section by the director means the assessed value of 50 14 such property as of the preceding January 1 as determined and 50 15 allocated among the local taxing districts by the director. 50 16 Nothing in this chapter shall be interpreted to authorize 50 17 local taxing districts to exclude from the calculation of levy 50 18 rates the adjusted assessed value of taxpayer property 50 19 reported to county auditors pursuant to this subsection. 50 20 Sec. 21. NEW SECTION. 437A.20 TAX EXEMPTIONS. 50 21 Except as provided in section 437A.16, all property tax 50 22 exemptions in the Code do not apply to property subject to the 50 23 statewide property tax unless such exemptions expressly refer 50 24 to the statewide property tax, except that if property was 50 25 exempt from property tax on January 1, 1998, such exemption 50 26 shall continue until the exemption expires, is phased out, or 50 27 is repealed. The property of a taxpayer who does not owe any 50 28 replacement tax is exempt from the statewide property tax for 50 29 the coinciding assessment year. 50 30 Sec. 22. NEW SECTION. 437A.21 RETURN AND PAYMENT 50 31 REQUIREMENTS. 50 32 1. Each electric company, natural gas company, electric 50 33 cooperative, municipal utility, and other person whose 50 34 property is subject to the statewide property tax shall file 50 35 with the director a return, on or before February 28 following 51 1 the assessment year, including, but not limited to, the 51 2 following information: 51 3 a. The assessed value of property subject to the statewide 51 4 property tax. 51 5 b. The amount of statewide property tax computed on such 51 6 assessed value. 51 7 2. The first return under subsection 1 is due on or before 51 8 February 28, 1999. 51 9 3. If an electric company, natural gas company, electric 51 10 cooperative, municipal utility, or person is not required to 51 11 file a statewide property tax return on or before February 28, 51 12 1999, but is required to file a return after such date, the 51 13 return shall be filed on or before the due date. This 51 14 subsection also applies in the event of a consolidation. 51 15 4. A return shall be signed by an officer, or other person 51 16 duly authorized by the taxpayer, and must be certified as 51 17 correct and in accordance with rules and forms prescribed by 51 18 the director. 51 19 5. At the time of filing the return with the director, the 51 20 taxpayer shall calculate the statewide property tax owed for 51 21 the assessment year and shall remit to the director the 51 22 statewide property tax required to be shown to be due on the 51 23 return. 51 24 Sec. 23. NEW SECTION. 437A.22 STATUTES APPLICABLE. 51 25 Sections 437A.9, 437A.10, 437A.12, 437A.13, and 437A.14, 51 26 subsection 1, are applicable to electric companies, natural 51 27 gas companies, electric cooperatives, municipal utilities, and 51 28 persons whose property is subject to the statewide property 51 29 tax. However, a required credit or refund of overpaid 51 30 statewide property tax pursuant to section 437A.14, subsection 51 31 1, as it applies to this subchapter, shall be made by the 51 32 director and not by city chief financial officers or county 51 33 treasurers. 51 34 Section 422.26 applies with respect to the statewide 51 35 property tax and penalties imposed by this chapter, except 52 1 that, as applied to any tax imposed by this chapter, the lien 52 2 provided shall be prior to and superior over all subsequent 52 3 liens upon any personal property within this state or right to 52 4 such personal property belonging to the taxpayer, without the 52 5 necessity of recording the lien as provided in section 422.26. 52 6 The requirement for recording, as applied to the statewide 52 7 property tax imposed by this chapter, shall apply only to a 52 8 lien upon real property. In order to preserve such lien 52 9 against subsequent mortgagees, purchasers, or judgment 52 10 creditors, for value and without notice of the lien, on any 52 11 real property situated in a county, the director shall file 52 12 with the recorder of the county in which the real property is 52 13 located a notice of the lien. 52 14 The county recorder of each county shall prepare and keep 52 15 in the recorder's office a book to be known as the index of 52 16 statewide property tax liens, so ruled as to show in 52 17 appropriate columns under the names of taxpayers arranged 52 18 alphabetically, all of the following: 52 19 1. The name of the taxpayer. 52 20 2. The name "State of Iowa" as claimant. 52 21 3. Time the notice of lien was received. 52 22 4. Date of notice. 52 23 5. Amount of lien then due. 52 24 6. Date of assessment. 52 25 7. Date when the lien is satisfied. 52 26 The recorder shall endorse on each notice of lien the day, 52 27 hour, and minute when received and preserve such notice, and 52 28 shall promptly record the lien in the manner provided for 52 29 recording real estate mortgages. The lien is effective from 52 30 the time of the indexing of the lien. 52 31 The director, from moneys appropriated to the department of 52 32 revenue and finance for this purpose, shall pay a recording 52 33 fee as provided in section 331.604 for the recording of the 52 34 lien, or for its satisfaction. 52 35 Upon the payment of the replacement tax as to which the 53 1 director has filed notice with a county recorder, the director 53 2 shall promptly file with the recorder a satisfaction of the 53 3 replacement tax. The recorder shall enter the satisfaction on 53 4 the notice on file in the recorder's office and indicate that 53 5 fact on the index. 53 6 Sec. 24. NEW SECTION. 437A.23 DEPOSIT OF TAX PROCEEDS. 53 7 All revenues received from imposition of the statewide 53 8 property tax shall be deposited in the general fund of the 53 9 state. An amount up to one-third of such revenues shall be 53 10 available to the utilities board for staffing assistance 53 11 provided to the replacement tax study committee established 53 12 pursuant to section 476.6, subsection 23, during the term of 53 13 the study committee. Fifty percent of the remaining revenues 53 14 shall be available to the department of management for 53 15 salaries, support, services, and equipment to administer the 53 16 replacement tax and to provide staffing assistance to the task 53 17 force established pursuant to section 437A.15, subsection 7. 53 18 The balance of the revenues shall be available to the 53 19 department of revenue and finance for salaries, support, 53 20 services, and equipment to administer and enforce the 53 21 replacement tax and the statewide property tax. 53 22 SUBCHAPTER 4 53 23 GENERAL PROVISIONS 53 24 Sec. 25. NEW SECTION. 437A.24 RECORDS. 53 25 Each electric company, natural gas company, electric 53 26 cooperative, municipal utility, and other person who is 53 27 subject to the replacement tax or the statewide property tax 53 28 shall maintain records associated with the replacement tax and 53 29 the assessed value of property subject to the statewide 53 30 property tax for a period of ten years following the later of 53 31 the original due date for filing a return pursuant to sections 53 32 437A.8 and 437A.22 in which such taxes are reported, or the 53 33 date on which either such return is filed. Such records shall 53 34 include those associated with any additions or dispositions of 53 35 property, and the allocation of such property among local 54 1 taxing districts. 54 2 Sec. 26. NEW SECTION. 437A.25 RULES. 54 3 The director of revenue and finance may adopt rules 54 4 pursuant to chapter 17A for the administration and enforcement 54 5 of this chapter. 54 6 Sec. 27. Section 257.3, subsection 1, Code 1997, is 54 7 amended by adding the following unnumbered paragraph: 54 8 NEW UNNUMBERED PARAGRAPH. Replacement taxes under chapter 54 9 437A shall be regarded as property taxes for purposes of this 54 10 chapter. 54 11 Sec. 28. Section 427.1, subsection 2, Code Supplement 54 12 1997, is amended to read as follows: 54 13 2. MUNICIPAL AND MILITARY PROPERTY. The property of a 54 14 county, township, city, school corporation, levee district, 54 15 drainage district or military company of the state of Iowa, 54 16 when devoted to public use and not held for pecuniary profit, 54 17 except property of a municipally owned electric utility held 54 18 under joint ownership and property of an electric power 54 19 facility financed under chapter 28F which shall be subject to 54 20assessment andtaxation underprovisions of chapters 428 and54 21437chapter 437A. The exemption for property owned by a city 54 22 or county also applies to property which is operated by a city 54 23 or county as a library, art gallery or museum, conservatory, 54 24 botanical garden or display, observatory or science museum, or 54 25 as a location for holding athletic contests, sports or 54 26 entertainment events, expositions, meetings or conventions, or 54 27 leased from the city or county for any such purposes. Food 54 28 and beverages may be served at the events or locations without 54 29 affecting the exemptions, provided the city has approved the 54 30 serving of food and beverages on the property if the property 54 31 is owned by the city or the county has approved the serving of 54 32 food and beverages on the property if the property is owned by 54 33 the county. 54 34 Sec. 29. Section 427B.17, subsection 5, Code Supplement 54 35 1997, is amended to read as follows: 55 1 5. This section shall not apply to property assessed by 55 2 the department of revenue and finance pursuant to sections 55 3 428.24 to 428.29, or chapters 433, 434, and 436 to 438, and 55 4 such property shall not receive the benefits of this section. 55 5 Any electric power generating plant which operated during 55 6 the preceding assessment year at a net capacity factor of more 55 7 than twenty percent, shallnot receive the benefits of this55 8section or of sections 15.332 and 15.334be taxed pursuant to 55 9 chapter 437A.For purposes of this section, "electric power55 10generating plant" means any name plate rated electric power55 11generating plant, in which electric energy is produced from55 12other forms of energy, including all taxable land, buildings,55 13and equipment used in the production of such energy. "Net55 14capacity factor" means net actual generation divided by the55 15product of net maximum capacity times the number of hours the55 16unit was in the active state during the assessment year. Upon55 17commissioning, a unit is in the active state until it is55 18decommissioned. "Net actual generation" means net electrical55 19megawatt hours produced by the unit during the preceding55 20assessment year. "Net maximum capacity" means the capacity55 21the unit can sustain over a specified period when not55 22restricted by ambient conditions or equipment deratings, minus55 23the losses associated with station service or auxiliary loads.55 24 Sec. 30. Section 428.24, Code 1997, is amended to read as 55 25 follows: 55 26 428.24 PUBLIC UTILITY PLANTS. 55 27 The lands, buildings, machinery, and mains belonging to 55 28 individuals or corporations operating waterworks or gasworks 55 29 or pipelines; the lands, buildings, machinery, tracks, poles,55 30and wires belonging to individuals, corporations or electric55 31power agencies furnishing electric light or power; and the55 32lands, buildings, machinery, poles, wires, overhead55 33construction, tracks, cables, conduits, and fixtures belonging55 34to individuals or corporations operating railways by cable or55 35electricity, or operating elevated street railways;, except 56 1 those natural gas pipelines permitted pursuant to chapter 479, 56 2 shall be listed and assessed by the department of revenue and 56 3 finance. In the making of assessments of waterworks plants, 56 4 the value of any interest in the property assessed, of the 56 5 municipal corporation where it is situated, shall be deducted, 56 6 whether the interest is evidenced by stock, bonds, contracts, 56 7 or otherwise. 56 8 Sec. 31. Section 428.26, Code 1997, is amended to read as 56 9 follows: 56 10 428.26 PERSONAL PROPERTY. 56 11 All the personal property of such individuals and 56 12 corporations used or purchased by them for the purposes of 56 13 such gas or waterworks, electric light plants, electric or56 14cable railways, elevated street railways or street railways56 15operated by animal power, including the rolling stock of such56 16railways and street railways, and the animals belonging to56 17such street railways operated by animal power,shall be listed 56 18 and assessed by the department of revenue and finance. In the 56 19 making of any such assessment of waterworks plants, the value 56 20 of any interest in the property so assessed, of the municipal 56 21 corporationwhereinin which thesamewaterworks is situated, 56 22 shall be deducted, whether such interest be evidenced by 56 23 stock, bonds, contracts, or otherwise. 56 24 Sec. 32. Section 428.28, Code 1997, is amended to read as 56 25 follows: 56 26 428.28 ANNUAL REPORT BY UTILITY. 56 27 Every individual, copartnership, corporation, or 56 28 association operating for profit, waterworks or gasworks or 56 29 pipe lines, electric light or power plant, railways operated56 30by electricity, elevated street railways, shallnot permitted 56 31 pursuant to chapter 479, annually on or beforethe first day56 32ofMay 1 of each calendar year, shall make a report on blanks 56 33 to be provided by the department of revenue and finance of all 56 34 of the property owned by such individual, copartnership, 56 35 corporation, or association within the incorporated limits of 57 1 any city in the state, and give such other information as the 57 2 director of revenue and finance shall require. 57 3 Every individual, copartnership, corporation, or 57 4 association which operates a public utility on a nonprofit 57 5 basis other than a utility subject to tax under chapter 437A, 57 6 as defined in section 428.24 shall annually, on or beforethe57 7first day ofMay 1 of each calendar year, make a report on 57 8 blanks to be provided by the department of revenue and finance 57 9 of all of the property owned by the individual, copartnership, 57 10 corporation, or association within the incorporated limits of 57 11 any city in the state, and give other information the director 57 12 of revenue and finance requires. 57 13 Sec. 33. Section 437.1, Code 1997, is amended by striking 57 14 the section and inserting in lieu thereof the following: 57 15 437.1 DEFINITIONS. 57 16 As used in this chapter, unless the context otherwise 57 17 requires: 57 18 1. "Company" means an electric cooperative referred to in 57 19 section 437A.7, subsection 2, paragraph "c". 57 20 2. "Electric cooperative" means an electric utility 57 21 provider formed or organized as an electric cooperative under 57 22 the laws of this state or elsewhere. 57 23 3. "Transmission lines" means electric lines and 57 24 associated facilities operating at thirty-four thousand five 57 25 hundred volts or higher voltage, and substations, 57 26 transformers, and associated facilities operated at thirty- 57 27 four thousand five hundred or more volts on the low voltage 57 28 side. 57 29 Sec. 34. Section 437.3, Code 1997, is amended to read as 57 30 follows: 57 31 437.3 VERIFICATION. 57 32 The verification of any statement required by law shall, in57 33the case of a person,be made bysuch person; in the case of a57 34corporation, by the president or secretary thereof; and in57 35case of a copartnership, association, or syndicate, bysome 58 1 member, officer, or agentthereofof the company having 58 2 knowledge of the facts. 58 3 Sec. 35. Section 438.1, Code 1997, is amended to read as 58 4 follows: 58 5 438.1 TAXATION PROCEDURE. 58 6 Every person, copartnership, association, corporation, or 58 7 syndicate engaged in the business of transporting or 58 8 transmitting gas, gasoline, oils, or motor fuels by means of 58 9 pipelines other than natural gas pipelines permitted pursuant 58 10 to chapter 479, whether such pipelines be owned or leased, 58 11 shall be taxed ashereinprovided in this chapter. 58 12 Sec. 36. Section 438.2, Code 1997, is amended to read as 58 13 follows: 58 14 438.2DEFINITIONSDEFINITION. 58 15The words "pipeline"Pipeline company", as used in this 58 16 chaptershall be deemed and construed to mean, means any 58 17 person, copartnership, association, corporation, or syndicate 58 18 that may own or operate or be engaged in operating or 58 19 utilizing pipelines, other than natural gas pipelines 58 20 permitted pursuant to chapter 479, for the purposes described 58 21 in section 438.1. 58 22 Sec. 37. Section 441.73, subsection 1, Code Supplement 58 23 1997, is amended to read as follows: 58 24 1. A litigation expense fund is created in the state 58 25 treasury. The litigation expense fund shall be used for the 58 26 payment of litigation expenses incurred by the state to defend 58 27 property valuations established by the director of revenue and 58 28 finance pursuant to section 428.24 and chapters 430A, 433, 58 29 434, 436, 437, 437A, and 438, and for the payment of 58 30 litigation expenses incurred by the state to defend the 58 31 imposition of replacement taxes and statewide property taxes 58 32 under chapter 437A. 58 33 Sec. 38. Section 476.6, Code 1997, is amended by adding 58 34 the following new subsections: 58 35 NEW SUBSECTION. 22. The costs of the replacement tax 59 1 imposed pursuant to chapter 437A shall be reflected in the 59 2 charges of utilities subject to rate regulation, in lieu of 59 3 the utilities' costs of property taxes. The imposition of the 59 4 replacement taxes pursuant to chapter 437A is not intended to 59 5 initiate any change in the rates and charges for the sale of 59 6 electricity, the sale of natural gas, or the transportation of 59 7 natural gas that is subject to regulation by the board and in 59 8 effect on the effective date of chapter 437A. 59 9 The cost of the replacement taxes imposed by chapter 437A 59 10 shall be allocated among and within customer classes in a 59 11 manner that will replicate the tax cost burden of the current 59 12 property tax on individual customers to the maximum extent 59 13 practicable. 59 14 Upon the restructuring of the electric industry in this 59 15 state so that individual consumers are given the right to 59 16 choose their electric suppliers, replacement tax costs shall 59 17 be assigned to the service corresponding to the individual 59 18 generation, transmission, and delivery taxes. In all other 59 19 respects, the allocation of the replacement tax costs among 59 20 and within the customer classes shall remain the same to the 59 21 maximum extent practicable. 59 22 Notwithstanding this subsection, the board may determine 59 23 the amount of replacement tax properly included in retail 59 24 rates subject to its jurisdiction. The board may determine 59 25 whether the base rates or some other form of rate is most 59 26 appropriate for recovery of the costs of the replacement tax, 59 27 subject to the requirement that utility rates be reasonable 59 28 and just. The board may also determine the appropriate 59 29 allocation of the tax. Any significant modification to rate 59 30 design relating to the replacement tax shall be made in a 59 31 manner consistent with this subsection unless made in a 59 32 contested case proceeding where the impact of such 59 33 modification on competition and consumer costs is considered. 59 34 NEW SUBSECTION. 23. On or before January 1, 2000, the 59 35 utilities board, in consultation with the department of 60 1 revenue and finance, shall initiate and coordinate the 60 2 establishment of a replacement tax study committee and provide 60 3 staffing assistance to the committee. It is the intent of the 60 4 general assembly that the committee include representatives of 60 5 the utilities board, department of revenue and finance, 60 6 department of management, investor-owned utilities, municipal 60 7 utilities, cooperative utilities, local governments, major 60 8 customer classes, and other stakeholders. 60 9 The committee shall study the effects of the replacement 60 10 tax on both restructuring and the development of competition 60 11 in the gas and electric industries in this state. The board 60 12 shall report to the general assembly by January 1, 2002, the 60 13 results of the study, and the committee's recommendations as 60 14 to whether the replacement tax, in its then present form, 60 15 should be continued, whether a different form of taxation of 60 16 electric and gas utilities should be adopted in order to allow 60 17 free and fair competition in the electric and gas industries, 60 18 and fair competitive prices for all classes of consumers, and 60 19 whether a different basis for determination of the generation, 60 20 transmission, and delivery taxes should be adopted or whether 60 21 the relative share of the total replacement tax burden imposed 60 22 on each of the generation, transmission, and delivery 60 23 functions should be modified in order to allow free and fair 60 24 competition in the electric and gas industries, and fair 60 25 competitive prices for all classes of consumers. The 60 26 replacement tax study committee shall reconvene by January 1, 60 27 2005, to further study these same issues, and the board shall 60 28 report the results of the study and the committee's 60 29 recommendations to the general assembly by January 1, 2007. 60 30 Sec. 39. SPECIAL REPORTING REQUIREMENTS. Within ninety 60 31 days of the effective date of this Act, each electric company, 60 32 electric cooperative not described in section 437A.7, 60 33 subsection 2, paragraph "c", municipal utility, and natural 60 34 gas company shall report to the director, by certified 60 35 statement subject to audit, the following information: 61 1 1. The entity's liability for centrally assessed property 61 2 tax, as defined in section 437A.3, subsection 2, allocated to 61 3 electric service for the assessment years 1992 through 1996 on 61 4 the basis of property tax payments made. 61 5 2. The entity's liability for centrally assessed property 61 6 tax, as defined in section 437A.3, subsection 2, allocated to 61 7 natural gas service for the assessment years 1992 through 1996 61 8 on the basis of property tax payments made. 61 9 3. The entity's total kilowatt-hours of electricity 61 10 generated which would have been subject to taxation under 61 11 section 437A.6 for the 1997 assessment year had such taxation 61 12 been in effect for assessment year 1997. Kilowatt-hours of 61 13 electricity generated by a facility which was jointly owned or 61 14 leased in assessment year 1997 shall be calculated and 61 15 reported pursuant to section 437A.6, subsection 2, as if such 61 16 subsection had been in effect for 1997. 61 17 4. The entity's total pole miles of electric transmission 61 18 lines owned or leased on December 31, 1997, by line voltage, 61 19 which would have been subject to taxation under section 437A.7 61 20 for the 1997 assessment year had such taxation been in effect 61 21 for assessment year 1997. Pole miles of electric transmission 61 22 lines which were jointly owned or leased in assessment year 61 23 1997 shall be calculated and reported pursuant to section 61 24 437A.7, subsection 3, as if such subsection had been in effect 61 25 for assessment year 1997. 61 26 5. The entity's total kilowatt-hours of electricity 61 27 delivered to consumers which would have been subject to 61 28 taxation under section 437A.4 for the assessment years 1993 61 29 through 1997 had such taxation been in effect for such 61 30 assessment years. 61 31 6. The entity's total therms of natural gas delivered to 61 32 consumers which would have been subject to taxation under 61 33 section 437A.5 for the assessment years 1993 through 1997 had 61 34 such taxation been in effect for such assessment years. 61 35 7. For each generation and transmission electric 62 1 cooperative, the excess property tax liability assignable to 62 2 each electric competitive service area principally served by 62 3 its distribution electric cooperative and municipal electric 62 4 cooperative association members pursuant to section 437A.4, 62 5 subsection 3, paragraph "c", subparagraph (4). 62 6 8. For each municipal electric cooperative association, 62 7 the excess property tax liability assignable to each electric 62 8 competitive service area principally served by its municipal 62 9 utility members on January 1, 1998. 62 10 If information necessary to compute the delivery tax rate 62 11 for any electric or natural gas competitive service area is 62 12 not timely reported, the director shall estimate a delivery 62 13 tax rate for such electric or natural gas competitive service 62 14 area which shall not be lower than the highest electric or 62 15 natural gas delivery tax rate computed for other electric or 62 16 natural gas competitive service areas. However, if such 62 17 information is provided within thirty days after the director 62 18 has published in the Iowa administrative bulletin the delivery 62 19 tax rates computed pursuant to section 437A.4, subsection 3, 62 20 paragraph "d", and section 437A.5, subsection 3, paragraph 62 21 "c", the director shall recalculate the electric or natural 62 22 gas delivery tax rate for such electric or natural gas 62 23 competitive service area and notify the taxpayers of the new 62 24 electric or natural gas delivery tax rate by publication in 62 25 the Iowa administrative bulletin on or before January 31, 62 26 1999. 62 27 Sec. 40. Sections 428.37 and 437.14, Code 1997, are 62 28 repealed. 62 29 Sec. 41. EFFECTIVE DATE AND RETROACTIVE APPLICABILITY. 62 30 1. This Act, being deemed of immediate importance, takes 62 31 effect upon enactment. 62 32 2. This Act is retroactively applicable to property tax 62 33 assessment years beginning on or after January 1, 1998, and to 62 34 replacement tax years beginning on or after January 1, 1998. 62 35 EXPLANATION 63 1 This bill generally replaces the current central property 63 2 tax assessment procedures utilized by the director of revenue 63 3 and finance in valuing property of entities involved primarily 63 4 in the production, delivery, and transmission of electricity 63 5 and natural gas within this state, with excise taxes on 63 6 electricity and natural gas, and a statewide property tax on 63 7 certain property of such entities. 63 8 The bill provides for the retroactive applicability of the 63 9 bill to property tax assessment years beginning on or after 63 10 January 1, 1998, and to replacement tax years beginning on or 63 11 after January 1, 1998. The bill is effective upon enactment. 63 12 LSB 3769YC 77 63 13 mj/jl/8
Text: HSB00691 Text: HSB00693 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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