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PAG LIN 1 1 SENATE FILE 2416 1 2 1 3 AN ACT 1 4 RELATING TO THE REPLACEMENT OF PROPERTY TAX ON PROPERTY 1 5 ASSOCIATED WITH ELECTRICITY AND NATURAL GAS WITH EXCISE 1 6 TAXES ASSOCIATED WITH ELECTRICITY AND NATURAL GAS, 1 7 ESTABLISHING A STATEWIDE PROPERTY TAX ON PROPERTY 1 8 ASSOCIATED WITH ELECTRICITY AND NATURAL GAS, PROVIDING 1 9 FOR A SPECIAL UTILITY PROPERTY TAX LEVY OR TAX CREDIT, 1 10 PROVIDING FOR THE ACT'S RETROACTIVE APPLICABILITY, 1 11 PROVIDING AN EFFECTIVE DATE, AND PROVIDING PENALTIES. 1 12 1 13 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 14 1 15 DIVISION I – INTRODUCTORY PROVISION 1 16 Section 1. LEGISLATIVE FINDINGS. The general assembly 1 17 finds that with the advent of restructuring of the electric 1 18 and natural gas utility industry, a competitive environment 1 19 will replace the current regulated monopoly environment. 1 20 Currently, utility companies are subject to property taxes 1 21 which are levied in various amounts with respect to utility 1 22 property located in areas serviced by the utility companies. 1 23 If the property tax, as currently levied, continues, the 1 24 property tax costs in Iowa will become a factor among 1 25 competitors in the pricing of electricity and natural gas. 1 26 Moreover, non-Iowa located electricity and natural gas 1 27 suppliers do not have property in Iowa subject to property tax 1 28 and to the extent that they are located in a low property tax 1 29 state, such property tax costs would grant to such non-Iowa 1 30 suppliers an unfair tax advantage over Iowa-based utility 1 31 companies. 1 32 The general assembly also finds that restructuring may 1 33 result in the loss of in-lieu-of-tax transfers from surplus 1 34 funds made by a municipal utility to the city. These 1 35 transfers take the place of a property tax and are recognized 2 1 in this Act as such. 2 2 Therefore, the general assembly finds that a need exists to 2 3 replace the current Iowa property tax system levied on 2 4 electric and natural gas utility companies located in Iowa. 2 5 However, any replacement tax needs to be revenue neutral so as 2 6 not to harm the fiscal stability of local governments which 2 7 depend upon such utility property taxes and municipal 2 8 transfers, and further, so as to negate tax costs as a factor 2 9 in a competitive utility industry environment. Additionally, 2 10 such replacement tax must allow fair and competitive prices 2 11 for consumers of electric and natural gas services, and 2 12 minimize the impact on the cost of such services to consumers. 2 13 The general assembly, therefore, finds that the replacement 2 14 tax should be imposed on the generation, transmission, and 2 15 delivery of electricity and natural gas. Statewide generation 2 16 and transmission taxes are necessary to ensure that in the 2 17 event such functions are conducted by stand-alone generation 2 18 and transmission companies, such companies will continue to 2 19 contribute to the tax base. However, imposition of a single 2 20 statewide delivery tax rate would unfairly increase tax costs 2 21 for some taxpayers while reducing such costs for others. Such 2 22 a result would impede a competitive environment and disrupt 2 23 the tax continuity for taxpayers, and has the potential to 2 24 unnecessarily increase costs for consumers of gas and 2 25 electricity. Therefore, to maintain tax continuity and tax 2 26 revenues for local government and to maintain tax continuity 2 27 and negate tax costs as a factor in a competitive environment 2 28 for taxpayers and consumers, the delivery tax rates should be 2 29 fixed by geographic service areas which are designed and 2 30 structured to accomplish these goals. 2 31 The current property tax valuation process for utility 2 32 companies is complex and time-consuming to administer. The 2 33 replacement tax eases this administrative burden on state 2 34 government. 2 35 Replacing the current system of property taxes levied on 3 1 electric and natural gas utility companies located in Iowa 3 2 with a system of excise taxes associated with electricity and 3 3 natural gas represents a significant change in the method of 3 4 taxing electric and natural gas utility companies. Due to the 3 5 importance of the revenues generated by these taxes to local 3 6 taxing districts, the general assembly finds it desirable to 3 7 implement this new system of taxation in advance of the 3 8 impending restructuring of the electric and natural gas 3 9 industry to ensure that the new system of taxation performs as 3 10 intended. 3 11 SUBCHAPTER 1 3 12 INTRODUCTORY PROVISIONS 3 13 Sec. 2. NEW SECTION. 437A.1 CLASSIFICATION OF CHAPTER. 3 14 The provisions of this chapter are classified and 3 15 designated as follows: 3 16 Subchapter 1 Introductory Provisions. 3 17 Subchapter 2 Generation, Transmission, and Delivery 3 18 Taxes. 3 19 Subchapter 3 Statewide Property Tax. 3 20 Subchapter 4 General Provisions. 3 21 Sec. 3. NEW SECTION. 437A.2 PURPOSES. 3 22 The purposes of this chapter are to replace property taxes 3 23 imposed on electric companies, natural gas companies, electric 3 24 cooperatives, and municipal utilities with a system of 3 25 taxation which will remove tax costs as a factor in a 3 26 competitive environment by imposing like generation, 3 27 transmission, and delivery taxes on similarly situated 3 28 competitors who generate, transmit, or deliver electricity or 3 29 natural gas in the same competitive service area, to preserve 3 30 revenue neutrality and debt capacity for local governments and 3 31 taxpayers, to preserve neutrality in the allocation and cost 3 32 impact of any replacement tax among and upon consumers of 3 33 electricity and natural gas in this state, and to provide a 3 34 system of taxation which reduces existing administrative 3 35 burdens on state government. 4 1 Sec. 4. NEW SECTION. 437A.3 DEFINITIONS. 4 2 As used in this chapter, unless the context otherwise 4 3 requires: 4 4 1. "Assessed value" means the base year assessed value, as 4 5 adjusted by section 437A.19, subsection 2. "Base year 4 6 assessed value", for a taxpayer other than an electric 4 7 company, natural gas company, or electric cooperative, means 4 8 the value attributable to property identified in section 4 9 427A.1, subsection 1, paragraph "h", certified by the 4 10 department of revenue and finance to the county auditors for 4 11 the assessment date of January 1, 1997, and the value 4 12 attributable to property identified in section 427A.1 and 4 13 section 427B.17, subsection 5, as certified by the local 4 14 assessors to the county auditors for the assessment date of 4 15 January 1, 1997. 4 16 For taxpayers that are electric companies, natural gas 4 17 companies, and electric cooperatives, "base year assessed 4 18 value" means the average of the total of these values for each 4 19 taxpayer for the assessment dates of January 1, 1993, through 4 20 January 1, 1997, allocated among taxing districts in 4 21 proportion to the allocation of the taxpayer's January 1, 4 22 1998, assessed value among taxing districts. "Base year 4 23 assessed value" does not include value attributable to steam- 4 24 operating property. 4 25 2. "Centrally assessed property tax" means property tax 4 26 imposed with respect to the value of property determined by 4 27 the director pursuant to section 427.1, subsection 2, section 4 28 428.29, chapter 437, and chapter 438, Code 1997, and allocated 4 29 to electric service and natural gas service. For purposes of 4 30 this subsection, "natural gas service" means such service 4 31 provided by natural gas pipelines permitted pursuant to 4 32 chapter 479. 4 33 3. "Consumer" means an end user of electricity or natural 4 34 gas used or consumed within this state. "Consumer" includes 4 35 any master-metered facility even though the electricity or 5 1 natural gas delivered to such facility may ultimately be used 5 2 by another person. A person to whom electricity or natural 5 3 gas is delivered by a master-metered facility is not a 5 4 consumer. A "master-metered facility" means any multi- 5 5 occupancy premises where units are separately rented or owned 5 6 and where electricity or natural gas is used in centralized 5 7 heating, cooling, water-heating, or ventilation systems, where 5 8 individual metering is impractical, where the facility is 5 9 designated for elderly or handicapped persons and utility 5 10 costs constitute part of the operating cost and are not 5 11 apportioned to individual units, or where submetering or 5 12 resale of service was permitted prior to 1966. 5 13 4. "Delivery" means the physical transfer of electricity 5 14 or natural gas to a consumer. Physical transfer to a consumer 5 15 occurs when transportation of electricity or natural gas ends 5 16 and such electricity or natural gas becomes available for use 5 17 or consumption by a consumer. 5 18 5. "Director" means the director of revenue and finance. 5 19 6. "Electric company" means a person engaged primarily in 5 20 the production, delivery, service, or sales of electric energy 5 21 whether formed or organized under the laws of this state or 5 22 elsewhere. "Electric company" includes a combination natural 5 23 gas company and electric company. "Electric company" does not 5 24 include an electric cooperative or a municipal utility. 5 25 7. "Electric competitive service area" means an electric 5 26 service area assigned by the utilities board under chapter 476 5 27 as of January 1, 1999, including utility property and 5 28 facilities described in section 476.23, subsection 3, which 5 29 were owned and served by the electric company, electric 5 30 cooperative, or municipal utility serving such area on January 5 31 1, 1999. 5 32 8. "Electric cooperative" means an electric utility 5 33 provider formed or organized as an electric cooperative under 5 34 the laws of this state or elsewhere. An electric cooperative 5 35 shall also include an incorporated city utility provider. 6 1 "Generation and transmission electric cooperative" means an 6 2 electric cooperative which owns both transmission lines and 6 3 property which is used to generate electricity. "Distribution 6 4 electric cooperative" means an electric cooperative other than 6 5 a generation and transmission electric cooperative or a 6 6 municipal electric cooperative association. 6 7 9. "Electric power generating plant" means a nameplate 6 8 rated electric power generating plant, which produces electric 6 9 energy from other forms of energy, including all taxable land, 6 10 buildings, and equipment used in the production of such 6 11 electric energy. 6 12 10. "Incorporated city utility provider" means a 6 13 corporation with assets worth one million dollars or more 6 14 which has one or more platted villages located within the 6 15 territorial limits of the tract of land which it owns, and 6 16 which provides electricity to ten thousand or fewer customers. 6 17 11. "Lease" means a contract between a lessor and lessee 6 18 pursuant to which the lessee obtains a present possessory 6 19 interest in tangible property without obtaining legal title in 6 20 such property. A contract to transmit or deliver electricity 6 21 or natural gas using operating property within this state is 6 22 not a lease. "Capital lease" means a lease classified as a 6 23 capital lease under generally accepted accounting principles. 6 24 12. "Local amount" means the first forty-four million four 6 25 hundred forty-four thousand four hundred forty-five dollars of 6 26 the acquisition cost of any major addition which is an 6 27 electric power generating plant and the total acquisition cost 6 28 of any other major addition. 6 29 13. "Local taxing district" means a city, county, 6 30 community college, school district, or other taxing district, 6 31 located in this state and authorized to certify a levy on 6 32 property located within such district for the payment of bonds 6 33 and interest or other obligations of such district. 6 34 14. "Low capacity factor electric power generating plant" 6 35 means, for any tax year, an electric power generating plant, 7 1 with the exception of an electric power generating plant owned 7 2 or leased by an electric company, an electric cooperative, or 7 3 a municipal utility, which operated during the preceding 7 4 calendar year at a net capacity factor of twenty percent or 7 5 less. "Net capacity factor" means net actual generation 7 6 during the preceding calendar year divided by the product of 7 7 nameplate capacity times the number of hours the plant was in 7 8 the active state during the preceding calendar year. Upon 7 9 commissioning, a plant is in the active state until it is 7 10 decommissioned. "Net actual generation" means net electrical 7 11 megawatt hours produced by a plant during the preceding 7 12 calendar year. 7 13 15. "Major addition" means any acquisition on or after 7 14 January 1, 1998, by a taxpayer, by transfer of ownership, 7 15 self-construction, or capital lease of any interest in any of 7 16 the following: 7 17 a. A building in this state where the acquisition cost of 7 18 all interests acquired exceeds ten million dollars. 7 19 b. An electric power generating plant where the 7 20 acquisition cost of all interests acquired exceeds ten million 7 21 dollars. For purposes of this paragraph, "electric power 7 22 generating plant" means each nameplate rated electric power 7 23 generating plant owned solely or jointly by any person or 7 24 electric power facility financed under the provisions of 7 25 chapter 28F in which electrical energy is produced from other 7 26 forms of energy, including all equipment used in the 7 27 production of such energy through its step-up transformer. 7 28 c. Natural gas operating property within a local taxing 7 29 district where the acquisition cost of all interests acquired 7 30 exceeds one million dollars. 7 31 d. Any operating property in this state by a person not 7 32 previously subject to taxation under this chapter. 7 33 For purposes of this chapter, the acquisition cost of an 7 34 asset acquired by capital lease is its capitalized value 7 35 determined under generally accepted accounting principles. 8 1 16. "Municipal electric cooperative association" means an 8 2 electric cooperative, the membership of which is composed 8 3 entirely of municipal utilities. 8 4 17. "Municipal utility" means all or part of an electric 8 5 light and power plant system or a natural gas system, either 8 6 of which is owned by a city, including all land, easements, 8 7 rights-of-way, fixtures, equipment, accessories, improvements, 8 8 appurtenances, and other property necessary or useful for the 8 9 operation of the municipal utility. 8 10 18. "Natural gas company" means a person that owns, 8 11 operates, or is engaged primarily in operating or utilizing 8 12 pipelines for the purpose of distributing natural gas to 8 13 consumers located within this state, excluding a gas 8 14 distributing plant or company located entirely within any city 8 15 and not a part of a pipeline transportation company. "Natural 8 16 gas company" includes a combination natural gas company and 8 17 electric company. "Natural gas company" does not include a 8 18 municipal utility. 8 19 19. a. "Natural gas competitive service area" means any 8 20 of the fifty-two natural gas competitive service areas 8 21 described as follows: 8 22 (1) Each of the following municipal natural gas 8 23 competitive service areas: 8 24 (a) Taylor county, except for those areas of Taylor county 8 25 which are contained within another municipal natural gas 8 26 competitive service area as described in this subsection. 8 27 (b) The city of Brighton in Washington county and the area 8 28 within two miles of the city limits plus sections 5, 6, 7, 8, 8 29 17, 18, 19, 20, 29, and 30 in Brighton township; sections 19, 8 30 30, and 33 in Franklin township; sections 1, 2, 11, 12, 13, 8 31 14, 23, 24, 25, and 36 in Dutch Creek township; and sections 8 32 25, 26, 35, and 36 in Seventy-Six township. 8 33 (c) Davis county. 8 34 (d) The city of Brooklyn in Poweshiek county and the area 8 35 within two miles of the city limits. 9 1 (e) The city of Cascade in Dubuque county and the area 9 2 within two miles of the city limits. 9 3 (f) The city of Cedar Falls in Black Hawk county and the 9 4 area within one mile of the city limits, not including any 9 5 part of the city of Waterloo. 9 6 (g) The city of Clearfield in Taylor county and the area 9 7 within two miles of the city limits and sections 20, 21, 26, 9 8 and 27 of Platte township, Grant township in Taylor county, 9 9 and Grant township in Ringgold county. 9 10 (h) The south half of Carroll county and sections 3 and 4 9 11 of Orange township in Guthrie county. 9 12 (i) Adams county, except those areas of Adams county which 9 13 are contained within another municipal natural gas competitive 9 14 service area as defined in this subsection. 9 15 (j) The city of Emmetsburg in Palo Alto county and the 9 16 area within two miles of the city limits. 9 17 (k) The city of Everly, in Clay county and the area within 9 18 two miles of the city limits. 9 19 (l) The city of Fairbank and the area within two miles of 9 20 the city limits plus the area one-quarter mile on either side 9 21 of the county line road, Highway 281, from Fairbank to the 9 22 intersection of Outer Road and Tenth Street, proceeding 9 23 twenty-eight hundredths of a mile north in Buchanan and 9 24 Fayette counties. 9 25 (m) The city of Gilmore City in Pocahontas and Humboldt 9 26 counties and the area within two miles of the city limits. 9 27 (n) The city of Graettinger in Palo Alto county and the 9 28 area within two miles of the city limits. 9 29 (o) The city of Guthrie Center, in Guthrie county and the 9 30 area within one mile of the city limits. 9 31 (p) The city of Harlan in Shelby county and the area 9 32 within two miles of the city limits. 9 33 (q) The city of Hartley in O'Brien county and the area 9 34 within one mile of the city limits, except the eastern one- 9 35 half of section four in Omega township. 10 1 (r) The city of Hawarden in Sioux county and the area 10 2 within two miles of the city limits. 10 3 (s) The city of Lake Park plus Silver Lake township in 10 4 Dickinson county. 10 5 (t) Fayette and New Buda townships in Decatur county. 10 6 (u) The city of Lenox in Taylor county including section 1 10 7 of Platte township in Taylor county and the townships of Carl, 10 8 Grant, Mercer, Colony, Union, and Prescott in Adams county. 10 9 (v) Grand River township in Wayne county. 10 10 (w) New Hope township in Union county and Monroe township 10 11 in Madison county. 10 12 (x) Ewoldt and Eden townships in Carroll county and Iowa 10 13 township in Crawford county. 10 14 (y) The city of Montezuma in Poweshiek county and the area 10 15 within two miles of the city limits plus Jackson township in 10 16 Poweshiek county except the city of Barnes City, Pleasant 10 17 Grove and Monroe townships in Mahaska county except the city 10 18 of Barnes City. 10 19 (z) Morning Sun township in Louisa county. 10 20 (aa) Wells and Washington townships in Appanoose county. 10 21 (ab) The city of Osage in Mitchell county and the area 10 22 within two miles of the city limits. 10 23 (ac) The city of Prescott in Adams county and the area 10 24 within two miles of the city limits. 10 25 (ad) The city of Preston in Jackson county and the area 10 26 within two miles of the city limits. 10 27 (ae) The city of Remsen in Plymouth county and the area 10 28 within two miles of the city limits. 10 29 (af) The city of Rock Rapids in Lyon county and the area 10 30 within two miles of the city limits. 10 31 (ag) The city of Rolfe in Pocahontas county and the area 10 32 within two miles of the city limits. 10 33 (ah) The city of Sabula in Jackson county and the area 10 34 within two miles of the city limits. 10 35 (ai) The city of Sac City in Sac county and the area 11 1 within two miles of the city limits. 11 2 (aj) The city of Sanborn in O'Brien county and the area 11 3 within two miles of the city limits. 11 4 (ak) The city of Sioux Center in Sioux county and the area 11 5 within two miles of the city limits. 11 6 (al) The city of Tipton in Cedar county and the area 11 7 within two miles of the city limits. 11 8 (am) The city of Waukee in Dallas county. 11 9 (an) The city of Wayland plus Jefferson and Trenton 11 10 townships in Henry county. 11 11 (ao) Seventy-Six and Lime Creek townships in Washington 11 12 county except for those areas of Seventy-Six township which 11 13 are contained within another municipal natural gas competitive 11 14 service area as defined in this subsection. 11 15 (ap) The city of West Bend in Kossuth and Palo Alto 11 16 counties and the area within two miles of the city limits. 11 17 (aq) The city of Whittemore in Kossuth county and the area 11 18 within two miles of the city limits. 11 19 (ar) Scott, Canaan, and Wayne townships in Henry county. 11 20 (as) The city of Woodbine in Harrison county and the area 11 21 within two miles of the city limits. 11 22 (at) Nishnabotna township in Crawford county. 11 23 (2) The natural gas competitive service area, excluding 11 24 any municipal natural gas competitive service area described 11 25 in subparagraph (1) and consisting of Sioux county; Plymouth 11 26 county; Woodbury county; Ida county; Harrison county; Shelby 11 27 county; Audubon county; Palo Alto county; Humboldt county; 11 28 Mahaska county; Scott county; Lyon county except Wheeler, 11 29 Dale, Liberal, Grant, Midland, and Elgin townships; O'Brien 11 30 county except Union, Dale, Summit, Highland, Franklin, and 11 31 Center townships; Cherokee county except Cherokee and Pilot 11 32 townships; Monona county except Franklin township and the 11 33 south half of Ashton township; Pottawattamie county except 11 34 Crescent, Hazel Dell, Lake, Garner, Kane, and Lewis townships; 11 35 Mills county except Glenwood and Center townships; Montgomery 12 1 county except Douglas, Washington, and East townships; Page 12 2 county except Valley, Douglas, Nodaway, Nebraska, Harlan, East 12 3 River, Amity, and Buchanan townships; Fremont county except 12 4 Green, Scott, Sidney, Benton, Washington, and Madison 12 5 townships; Brighton and Pleasant townships in Cass county; Sac 12 6 county except Clinton, Wall Lake, Coon Valley, Levey, Viola, 12 7 and Sac townships; Newell township in Buena Vista county; 12 8 Calhoun county except Reading township; Denmark township in 12 9 Emmet county; Kossuth county except Eagle, Grant, Springfield, 12 10 Hebron, Swea, Harrison, Ledyard, Lincoln, Seneca, Greenwood, 12 11 Ramsey, and German townships; Webster county except Roland, 12 12 Clay, Burnside, Yell, Webster, Gowrie, Lost Grove, Dayton, and 12 13 Hardin townships; Guthrie county except Grant, Thompson, and 12 14 Beaver townships; Union township in Union county; Madison 12 15 county except Ohio and New Hope townships; Warren county 12 16 except Virginia, Squaw, Liberty, and White Breast townships; 12 17 Cedar, Union, Bluff Creek, and Pleasant townships in Monroe 12 18 county; Marion county except Lake Prairie, Knoxville, Summit, 12 19 and Union townships; Dallas county except Des Moines and Grant 12 20 townships; Polk county except sections 4, 5, 6, 7, 8, 9, 16, 12 21 17, and 18 in Lincoln township and the city of Grimes, and 12 22 sections 1, 2, 3, 10, 11, 12, 13, 14, and 15 in Union 12 23 township; Poweshiek, Washington, Mound Prairie, Des Moines, 12 24 Elk Creek, and Fairview townships in Jasper county; Wright 12 25 county except Belmond and Pleasant townships; Geneseo township 12 26 in Cerro Gordo county; Franklin county except Wisner and Scott 12 27 townships and the city of Coulter; Butler county except 12 28 Bennezette, Coldwater, Dayton, and Fremont townships; Floyd 12 29 county except Rock Grove, Rudd, Rockford, Ulster, Scott, and 12 30 Union townships; Branford township in Chickasaw county; Bremer 12 31 county except Frederika, LeRoy, Sumner No. 2, Fremont, Dayton, 12 32 Maxfield, and Franklin townships; Perry, Washington, Westburg, 12 33 and Sumner townships in Buchanan county; Black Hawk county 12 34 except Big Creek township; Fremont township in Benton county; 12 35 Wapello county except Washington township; Benton and Steady 13 1 Run townships in Keokuk county; the city of Barnes City in 13 2 Poweshiek county; Iowa township in Washington county; Johnson 13 3 county except Fremont township; Linn county except Grant 13 4 Spring Grove, Jackson, Boulder, Washington, Monroe township 13 5 west and north of Otter Creek and County Home Road, Otter 13 6 Creek, Maine, Buffalo, Fayette, and Clinton townships; 13 7 Farmington township in Cedar county; Wapsinonoc, Goshen, 13 8 Moscow, Wilton, and Fulton townships in Muscatine county; and 13 9 Lee county except Des Moines, Montrose, Keokuk, and Jackson 13 10 townships. 13 11 (3) The natural gas competitive service area, excluding 13 12 any municipal natural gas competitive service areas described 13 13 in subparagraph (1) and consisting of that part of Kossuth 13 14 county not described in subparagraph (2); Lincoln and Buffalo 13 15 townships in Winnebago county; Worth county except Silver 13 16 Lake, Hartland, Bristol, Brookfield, Fertile, and Danville 13 17 townships; Cerro Gordo county except Grimes, Pleasant Valley, 13 18 and Dougherty townships; Rock Grove and Rudd townships in 13 19 Floyd county; Eden, Camanche, and Hampshire townships and the 13 20 city of Clinton in Clinton county; and Stacyville and Union 13 21 townships in Mitchell county. 13 22 (4) The natural gas competitive service area, excluding 13 23 any municipal natural gas service areas described in 13 24 subparagraph (1) and consisting of Franklin township and the 13 25 South Half of Ashton township in Monona county; Crescent, 13 26 Hazel Dell, Lake, Garner, Kane, and Lewis townships in 13 27 Pottawattamie county; Glenwood and Center townships in Mills 13 28 county; Green, Scott, Sidney, Benton, Washington, and Madison 13 29 townships in Fremont county; Cass, Bear Grove, Union, Noble, 13 30 Edna, Victoria, Massena, Lincoln, and Grant townships in Cass 13 31 county; Glidden township in Carroll county; Summit township in 13 32 Adair county; Grant township in Guthrie county; Crawford 13 33 county except Nishnabotna township; Clinton, Wall Lake, Coon 13 34 Valley, Levey, Viola, and Sac township in Sac county; Reading 13 35 township in Calhoun county; Marshall, Sherman, Roosevelt, 14 1 Dover, Grant, Lincoln, and Cedar townships in Pocahontas 14 2 county; Union, Dale, Summit, Highland, Franklin, and Center 14 3 townships in O'Brien county; the north half of Clay county 14 4 plus Clay township; Dickinson county; Emmet county except 14 5 Denmark, Armstrong Grove, and Iowa Lake townships; Greene 14 6 county except Bristol, Hardin, Jackson, and Grant townships; 14 7 Boone county except Worth, Colfax, Des Moines, Jackson, Dodge, 14 8 and Harrison townships; Des Moines and Grant townships in 14 9 Dallas county; Roland, Clay, Burnside, Yell, Webster, Gowrie, 14 10 Lost Grove, Dayton, and Newark townships in Webster county; 14 11 Clear Lake, Hamilton, Webster, Freedom, Independence, Cass, 14 12 and Fremont townships in Hamilton county; Ell, Madison, and 14 13 Ellington townships in Hancock county; Winnebago county except 14 14 Lincoln and Buffalo townships; Silver Lake, Hartland, Bristol, 14 15 Brookfield, Fertile, and Danville townships in Worth county; 14 16 Etna township in Hardin county; Lafayette township and the 14 17 west one-half of Howard township in Story county; the city of 14 18 Grimes in Polk county; Independence, Malaka, Mariposa, Hickory 14 19 Grove, Rock Creek, Kellogg, Newton, Sherman, Palo Alto, Buena 14 20 Vista, and Richland townships in Jasper county; Palermo, 14 21 Grant, and Fairfield townships in Grundy county; Bennezette, 14 22 Coldwater, Dayton, and Fremont townships in Butler county; 14 23 Rockford, Ulster, Scott, and Union townships in Floyd county; 14 24 St. Ansgar and Mitchell townships in Mitchell county; Howard 14 25 county; Chickasaw county except Branford township; Frederika, 14 26 LeRoy, Sumner No. 2, Fremont, Dayton, Maxfield, and Franklin 14 27 townships in Bremer county; Big Creek township in Black Hawk 14 28 county; Brown township in Linn county; Madison township and 14 29 the east half of Buffalo township in Buchanan county; Fayette 14 30 county except Harlan, Fremont, Oran, and Jefferson townships; 14 31 Winneshiek county; Alamakee county; Clayton county; Delaware 14 32 county except Adams and Hazel Green townships; Dubuque county; 14 33 Jones county except Rome, Hale, Oxford, and the east half of 14 34 Greenfield townships; and Jackson county. 14 35 (5) The natural gas competitive service area consisting of 15 1 Des Moines, Montrose, Keokuk, and Jackson townships in Lee 15 2 county. 15 3 (6) The natural gas competitive service area consisting of 15 4 the city of Allerton and the area within two miles of the city 15 5 limits. 15 6 (7) The natural gas competitive service area consisting of 15 7 all of Iowa not contained in any of the other natural gas 15 8 competitive service areas described in this paragraph. 15 9 b. "Township" includes any city or part of a city located 15 10 within the exterior boundaries of that township. 15 11 c. References to city limits contained in this subsection 15 12 mean those city limits as they existed on January 1, 1999. 15 13 20. "Operating property" means all property owned by or 15 14 leased to an electric company, electric cooperative, municipal 15 15 utility, or natural gas company, not otherwise taxed 15 16 separately, which is necessary to and without which the 15 17 company could not perform the activities of an electric 15 18 company, electric cooperative, municipal utility, or natural 15 19 gas company. 15 20 21. "Pole miles" means miles measured along the line of 15 21 poles, structures, or towers carrying electric conductors 15 22 regardless of the number of conductors or circuits carried, 15 23 and miles of conduit bank, regardless of number of conduits or 15 24 ducts, of all sizes and types, including manholes and 15 25 handholes. "Conduit bank" means a length of one or more 15 26 underground conduits or ducts, whether or not enclosed in 15 27 concrete, designed to contain underground cables, including a 15 28 gallery or cable tunnel for power cables. 15 29 22. "Purchasing member" means a municipal utility which 15 30 purchases electricity from a municipal electric cooperative 15 31 association of which it is a member. 15 32 23. "Replacement tax" means the excise tax imposed on the 15 33 generation, transmission, delivery, consumption, or use of 15 34 electricity or natural gas under sections 437A.4, 437A.5, 15 35 437A.6, or 437A.7. 16 1 24. "Self-generator" means a person, other than an 16 2 electric company, natural gas company, electric cooperative, 16 3 or municipal utility, who generates, by means of an on-site 16 4 facility wholly owned by or leased in its entirety to such 16 5 person, electricity solely for its own consumption, except for 16 6 inadvertent unscheduled deliveries to the electric utility 16 7 furnishing electric service to that self-generator. A person 16 8 who generates electricity which is consumed by any other 16 9 person, including any owner, shareholder, member, beneficiary, 16 10 partner, or associate of the person who generates electricity, 16 11 is not a self-generator. For purposes of this subsection, 16 12 "on-site facility" means an electric power generating plant 16 13 that is wholly owned by or leased in its entirety to a person 16 14 and used to generate electricity solely for consumption by 16 15 such person on the same parcel of land on which such plant is 16 16 located or on a contiguous parcel of land. For purposes of 16 17 this subsection, "parcel of land" includes each separate 16 18 parcel of land shown on the tax list. 16 19 25. "Statewide amount" means the acquisition cost of any 16 20 major addition which is not a local amount. 16 21 26. "Taxpayer" means an electric company, natural gas 16 22 company, electric cooperative, municipal utility, or other 16 23 person subject to the replacement tax imposed under section 16 24 437A.4, 437A.5, 437A.6, or 437A.7. 16 25 27. "Tax year" means a calendar year beginning January 1 16 26 and ending December 31. 16 27 28. "Transfer replacement tax" means the tax imposed in a 16 28 competitive service area of a municipal utility which replaces 16 29 transfers made by the municipal utility in accordance with 16 30 section 384.89. 16 31 29. "Transmission line" means a line, wire, or cable which 16 32 is capable of operating at an electric voltage of at least 16 33 thirty-four and one-half kilovolts. 16 34 30. "Utilities board" means the utilities board created in 16 35 section 474.1. 17 1 SUBCHAPTER 2 17 2 GENERATION, TRANSMISSION, AND DELIVERY TAXES 17 3 Sec. 5. NEW SECTION. 437A.4 REPLACEMENT TAX IMPOSED ON 17 4 DELIVERY OF ELECTRICITY. 17 5 1. A replacement delivery tax is imposed on every person 17 6 who makes a delivery of electricity to a consumer within this 17 7 state. The replacement delivery tax imposed by this section 17 8 is equal to the sum of the following: 17 9 a. The number of kilowatt-hours of electricity delivered 17 10 to consumers by the taxpayer within each electric competitive 17 11 service area during the tax year multiplied by the electric 17 12 replacement delivery tax rate in effect for each such electric 17 13 competitive service area. 17 14 b. Where applicable, and in addition to the tax imposed by 17 15 paragraph "a", the number of kilowatt-hours of electricity 17 16 delivered to consumers by the taxpayer within each electric 17 17 competitive service area during the tax year multiplied by the 17 18 electric transfer replacement tax rate for each such electric 17 19 competitive service area. 17 20 2. If electricity is consumed in this state, whether such 17 21 electricity is purchased, transferred, or self-generated, and 17 22 the delivery, purchase, transference, or self-generation of 17 23 such electricity is not subject to the tax imposed under 17 24 subsection 1, a tax is imposed on the consumer at the rates 17 25 prescribed under subsection 1. 17 26 3. Electric replacement delivery tax rates shall be 17 27 calculated by the director for each electric competitive 17 28 service area as follows: 17 29 a. The director shall determine the average centrally 17 30 assessed property tax liability allocated to electric service 17 31 of each taxpayer, other than a municipal utility, principally 17 32 serving an electric competitive service area and of each 17 33 generation and transmission electric cooperative for the 17 34 assessment years 1993 through 1997 based on property tax 17 35 payments made. In the case of a municipal utility, the 18 1 average centrally assessed property tax liability allocated to 18 2 electric service is the centrally assessed property tax 18 3 liability of such municipal utility allocated to electric 18 4 service for the 1997 assessment year based on property tax 18 5 payments made. 18 6 b. The director shall determine, for each taxpayer, the 18 7 number of kilowatt-hours of electricity generated which would 18 8 have been subject to taxation under section 437A.6, the number 18 9 of pole miles which would have been subject to taxation under 18 10 section 437A.7, and the number of kilowatt-hours of 18 11 electricity delivered to consumers which would have been 18 12 subject to taxation under this section in calendar year 1998, 18 13 had such sections been in effect for calendar year 1998. 18 14 c. The director shall determine the electric generation, 18 15 transmission, and delivery tax components of the average 18 16 centrally assessed property tax liability determined in 18 17 paragraph "a" for each electric competitive service area as 18 18 follows: 18 19 (1) The electric generation tax component for an electric 18 20 competitive service area shall be computed by multiplying the 18 21 tax rate set forth in section 437A.6 by the number of 18 22 kilowatt-hours of electricity generated by the taxpayer 18 23 principally serving such electric competitive service area 18 24 which would have been subject to taxation under section 437A.6 18 25 in calendar year 1998, had that section been in effect for 18 26 calendar year 1998. 18 27 (2) The electric transmission tax component for an 18 28 electric competitive service area shall be computed by 18 29 multiplying the tax rates set forth in section 437A.7 by the 18 30 number of pole miles for each line voltage owned or leased by 18 31 the taxpayer principally serving such electric competitive 18 32 service area which would have been subject to taxation under 18 33 section 437A.7 on December 31, 1998, had that section been in 18 34 effect for calendar year 1998. 18 35 (3) The electric delivery tax component for an electric 19 1 competitive service area shall be the average centrally 19 2 assessed property tax liability allocated to electric service 19 3 of the taxpayer principally serving such electric competitive 19 4 service area less the electric generation and transmission tax 19 5 components computed for such electric competitive service 19 6 area. 19 7 (4) The electric delivery tax component for each electric 19 8 competitive service area shall be adjusted, as necessary, to 19 9 assign the excess property tax liability of each generation 19 10 and transmission electric cooperative to the electric 19 11 competitive service areas principally served on January 1, 19 12 1999, by its distribution electric cooperative members and by 19 13 those municipal utilities which were purchasing members of a 19 14 municipal electric cooperative association that is a member of 19 15 the generation and transmission electric cooperative. Such 19 16 assignment of excess property tax liability of each such 19 17 generation and transmission electric cooperative shall be made 19 18 in proportion to the appropriate wholesale rate charges in 19 19 calendar year 1998 to its distribution electric cooperative 19 20 members and municipal electric cooperative association members 19 21 which purchased electricity from the generation and 19 22 transmission electric cooperative. Any amount assignable to a 19 23 municipal electric cooperative association shall be reassigned 19 24 to the electric competitive service areas served by such 19 25 association's purchasing municipal utility members and shall 19 26 be allocated among them in proportion to the appropriate 19 27 wholesale rate charges in calendar year 1998 by such municipal 19 28 electric cooperative association to its purchasing municipal 19 29 utility members. For purposes of this subsection, "excess 19 30 property tax liability" means the amount by which the average 19 31 centrally assessed property tax liability for the assessment 19 32 years 1993 through 1997 of a generation and transmission 19 33 electric cooperative exceeds the tentative generation and 19 34 transmission taxes which would have been imposed on such 19 35 generation and transmission electric cooperative under 20 1 sections 437A.6 and 437A.7 for calendar year 1998, had such 20 2 taxes been in effect for calendar year 1998. An electric 20 3 cooperative described in section 437A.7, subsection 2, 20 4 paragraph "c", is deemed not to have any excess property tax 20 5 liability. 20 6 d. The director shall determine an electric delivery tax 20 7 rate for each electric competitive service area by dividing 20 8 the electric delivery tax component for the electric 20 9 competitive service area, as adjusted by paragraph "c", 20 10 subparagraph (4), by the number of kilowatt-hours delivered by 20 11 the taxpayer principally serving the electric competitive 20 12 service area to consumers in calendar year 1998, which would 20 13 have been subject to taxation under this section if this 20 14 section had been in effect for calendar year 1998. 20 15 4. Municipal electric transfer replacement tax rates shall 20 16 be calculated annually by the city council of each city 20 17 located within an electric competitive service area served by 20 18 a municipal utility as of January 1, 1999, by dividing the 20 19 average annual dollar amount of electric related transfers 20 20 made pursuant to section 384.89 by the municipal utility 20 21 serving the electric competitive service area, other than 20 22 those transfers declared exempt from the transfer replacement 20 23 tax by the city council, plus the municipal transfer 20 24 replacement tax received by the municipality, if any, during 20 25 the five immediately preceding calendar years by the number of 20 26 kilowatt-hours of electricity delivered to consumers in the 20 27 electric competitive service area during the immediately 20 28 preceding calendar year which were subject to taxation under 20 29 this section or which would have been subject to taxation 20 30 under this section had it been in effect for such calendar 20 31 year. The city council on its own motion, or in the case of a 20 32 municipal utility governed by a board of trustees under 20 33 chapter 388 upon a resolution of the board of trustees 20 34 requesting such action, may declare any transfer or part of 20 35 such transfer to be exempt from the transfer replacement tax 21 1 under this section. Such rates shall be calculated and 21 2 reported to the director on or before August 31 of each tax 21 3 year. 21 4 5. A municipal utility taxpayer is entitled to a credit 21 5 against the municipal electric transfer replacement tax equal 21 6 to the average amount of electric-related transfers made by 21 7 such municipal utility taxpayer under section 384.89, other 21 8 than those transfers declared exempt from transfer replacement 21 9 tax by the city council, during the preceding five calendar 21 10 years. 21 11 6. The following are not subject to the replacement 21 12 delivery tax imposed by subsections 1 and 2: 21 13 a. Delivery of electricity generated by a low capacity 21 14 factor electric power generating plant. 21 15 b. Delivery of electricity to a city from such city's 21 16 municipal utility, provided such electricity is used by the 21 17 city for the public purposes of the city. 21 18 c. Electricity consumed by a state university or 21 19 university of science and technology, provided such 21 20 electricity was generated by property described in section 21 21 427.1, subsection 1. 21 22 d. Electricity generated and consumed by a self-generator. 21 23 7. Notwithstanding subsection 1, the electric delivery tax 21 24 rate applied to kilowatt-hours of electricity delivered by a 21 25 taxpayer to utility property and facilities which are placed 21 26 in service on or after January 1, 1999, and are owned by or 21 27 leased to and initially served by such taxpayer shall be the 21 28 electric delivery tax rate in effect for the electric 21 29 competitive service area principally served by such utility 21 30 property and facilities even though such utility property and 21 31 facilities may be physically located in another electric 21 32 competitive service area. 21 33 8. If for any tax year after calendar year 1998, the total 21 34 taxable kilowatt-hours of electricity required to be reported 21 35 by taxpayers pursuant to section 437A.8, subsection 1, 22 1 paragraphs "a" and "b", with respect to any electric 22 2 competitive service area, increases or decreases by more than 22 3 the threshold percentage from the average of the base year 22 4 amounts for that electric competitive service area during the 22 5 immediately preceding five calendar years, the tax rate 22 6 imposed under subsection 1, paragraph "a", and subsection 2, 22 7 for that tax year shall be recalculated by the director for 22 8 that electric competitive service area so that the total of 22 9 the replacement electric delivery taxes required to be 22 10 reported pursuant to section 437A.8, subsection 1, paragraph 22 11 "e", for that electric competitive service area with respect 22 12 to the tax imposed under subsection 1, paragraph "a", and 22 13 subsection 2, shall be as follows: 22 14 a. If the number of kilowatt-hours of electricity required 22 15 to be reported increased by more than the threshold 22 16 percentage, one hundred two percent of such taxes required to 22 17 be reported by taxpayers for that electric competitive service 22 18 area for the immediately preceding tax year. 22 19 b. If the number of kilowatt-hours of electricity required 22 20 to be reported decreased by more than the threshold 22 21 percentage, ninety-eight percent of such taxes required to be 22 22 reported by taxpayers for that electric competitive service 22 23 area for the immediately preceding tax year. 22 24 For purposes of paragraphs "a" and "b", in computing the 22 25 tax rate under subsection 1, paragraph "a", and subsection 2, 22 26 for tax year 1999, the director shall use the electric 22 27 delivery tax component computed for the electric competitive 22 28 service area pursuant to subsection 3, paragraph "c", in lieu 22 29 of the taxes required to be reported for that electric 22 30 competitive service area for the immediately preceding tax 22 31 year. 22 32 The threshold percentage shall be determined annually and 22 33 shall be eight percent for any electric competitive service 22 34 area in which the average of the base year amounts for the 22 35 preceding five calendar years does not exceed three billion 23 1 kilowatt-hours, and ten percent for all other electric 23 2 competitive service areas. 23 3 Any such recalculation of an electric delivery tax rate, if 23 4 required, shall be made and the new rate shall be published in 23 5 the Iowa administrative bulletin by the director by no later 23 6 than May 31 following the tax year. The director shall adjust 23 7 the tentative replacement tax imposed by subsection 1, 23 8 paragraph "a", and subsection 2 required to be shown on any 23 9 affected taxpayer's return pursuant to section 437A.8, 23 10 subsection 1, paragraph "e", to reflect the adjusted delivery 23 11 tax rate for the tax year, and report such adjustment to the 23 12 affected taxpayer on or before June 30 following the tax year. 23 13 The new electric delivery tax rate shall apply prospectively, 23 14 until such time as further adjustment is required. 23 15 For purposes of this section, "base year amount" means for 23 16 calendar years prior to tax year 1999, the sum of the 23 17 kilowatt-hours of electricity delivered to consumers within an 23 18 electric competitive service area by the taxpayer principally 23 19 serving such electric competitive service area which would 23 20 have been subject to taxation under this section had this 23 21 section been in effect for those years; and for tax years 23 22 after calendar year 1998, the taxable kilowatt-hours of 23 23 electricity required to be reported by taxpayers pursuant to 23 24 section 437A.8, subsection 1, paragraphs "a" and "b", with 23 25 respect to any electric competitive service area. 23 26 9. a. After calendar year 1998, if a municipal electric 23 27 cooperative association ceases to purchase electricity from 23 28 the generation and transmission electric cooperative from 23 29 which it purchased electricity in 1998, and for a period of 23 30 one hundred eighty days after such purchases cease, no 23 31 municipal utility member of such association purchases 23 32 electricity from such generation and transmission electric 23 33 cooperative, the excess property tax liability assigned 23 34 pursuant to subsection 3, paragraph "c", subparagraph (4), to 23 35 the electric competitive service areas principally served by 24 1 the municipal utility members on January 1, 1999, shall be 24 2 removed from the electric delivery tax component of those 24 3 electric competitive service areas and the electric delivery 24 4 tax rate for those electric competitive service areas shall be 24 5 recalculated to reflect that change. 24 6 b. After calendar year 1998, if a municipal utility ceases 24 7 to be a purchasing member of a municipal electric cooperative 24 8 association which purchased electricity in calendar year 1998 24 9 from a generation and transmission electric cooperative, and 24 10 for a period of one hundred eighty days after the municipal 24 11 utility ceases to be a purchasing member of such association 24 12 such municipal utility does not purchase electricity from such 24 13 generation and transmission electric cooperative, the excess 24 14 property tax liability assigned pursuant to subsection 3, 24 15 paragraph "c", subparagraph (4), to the electric competitive 24 16 service area principally served by the municipal utility on 24 17 January 1, 1999, shall be removed from the electric delivery 24 18 tax component of those electric competitive service areas and 24 19 the electric delivery tax rate for those electric competitive 24 20 service areas shall be recalculated to reflect that change. 24 21 c. If a recalculation has previously been made by the 24 22 director pursuant to subsection 8 for an electric competitive 24 23 service area described in this subsection, the recalculation 24 24 required by this subsection shall be made by the director by 24 25 modifying the most recent recalculation under subsection 8 to 24 26 eliminate the excess property tax liability originally 24 27 allocated to such electric competitive service area under 24 28 subsection 3, paragraph "c", subparagraph (4). 24 29 d. Any recalculation required by this subsection shall be 24 30 made and the new rate shall be published in the Iowa 24 31 administrative bulletin by the director by May 31 of the 24 32 calendar year during which the events described in paragraphs 24 33 "a" and "b" are reported as provided in section 437A.8, 24 34 subsection 1, paragraph "f". The new electric delivery tax 24 35 rate shall be effective January 1 of the tax year in which it 25 1 is published and shall apply prospectively, until such time as 25 2 further adjustment is required. 25 3 10. The electric delivery tax rate in effect for each 25 4 electric competitive service area shall be published by the 25 5 director in the Iowa administrative bulletin on or before 25 6 November 30, 1999, and annually after that date, during the 25 7 last quarter of the tax year. 25 8 Sec. 6. NEW SECTION. 437A.5 REPLACEMENT TAX IMPOSED ON 25 9 DELIVERY OF NATURAL GAS. 25 10 1. A replacement delivery tax is imposed on every person 25 11 who makes a delivery of natural gas to a consumer within this 25 12 state. The replacement delivery tax imposed by this section 25 13 shall be equal to the sum of the following: 25 14 a. The number of therms of natural gas delivered to 25 15 consumers by the taxpayer within each natural gas competitive 25 16 service area during the tax year multiplied by the natural gas 25 17 delivery tax rate in effect for each such natural gas 25 18 competitive service area. 25 19 b. Where applicable, and in addition to the tax imposed by 25 20 paragraph "a", the number of therms of natural gas delivered 25 21 to consumers by the taxpayer within each natural gas 25 22 competitive service area during the tax year multiplied by the 25 23 municipal natural gas transfer replacement tax rate for each 25 24 such natural gas competitive service area. 25 25 2. If natural gas is consumed in this state, whether such 25 26 natural gas is purchased or transferred, and the delivery, 25 27 purchase, or transference of such natural gas is not subject 25 28 to the tax imposed under subsection 1, a tax is imposed on the 25 29 consumer at the rates prescribed under subsection 1. 25 30 3. Natural gas delivery tax rates shall be calculated by 25 31 the director for each natural gas competitive service area as 25 32 follows: 25 33 a. The director shall determine the average centrally 25 34 assessed property tax liability allocated to natural gas 25 35 service of each taxpayer, other than a municipal utility, 26 1 principally serving a natural gas competitive service area for 26 2 the assessment years 1993 through 1997 based on property tax 26 3 payments made. In the case of a municipal utility, the 26 4 average centrally assessed property tax liability allocated to 26 5 natural gas service is the centrally assessed property tax 26 6 liability of such municipal utility allocated to natural gas 26 7 service for the 1997 assessment year based on property tax 26 8 payments made. For purposes of this subsection, taxpayer does 26 9 not include a pipeline company defined in section 479A.2. 26 10 b. The director shall determine for each taxpayer the 26 11 number of therms of natural gas delivered to consumers which 26 12 would have been subject to taxation under this section in 26 13 calendar year 1998 had this section been in effect for 26 14 calendar year 1998. 26 15 c. The director shall determine a natural gas delivery tax 26 16 rate for each natural gas competitive service area by dividing 26 17 the average centrally assessed property tax liability 26 18 allocated to natural gas service of the taxpayer principally 26 19 serving the natural gas competitive service area by the number 26 20 of therms of natural gas delivered by such taxpayer to 26 21 consumers in calendar year 1998 which would have been subject 26 22 to taxation under this section had such section been in effect 26 23 for calendar year 1998. 26 24 4. Municipal natural gas transfer replacement tax rates 26 25 shall be calculated annually by the city council of each city 26 26 located within a natural gas competitive service area served 26 27 by a municipal utility as of January 1, 1999, by dividing the 26 28 average annual dollar amount of natural gas related transfers 26 29 made pursuant to section 384.89 by the municipal utility 26 30 serving the natural gas competitive service area, other than 26 31 those transfers declared exempt from the transfer replacement 26 32 tax by the city council, plus the municipal transfer 26 33 replacement tax received by the municipality, if any, during 26 34 the five immediately preceding calendar years, by the number 26 35 of therms of natural gas delivered to consumers in the natural 27 1 gas competitive service area during the immediately preceding 27 2 calendar year which were subject to taxation under this 27 3 section or which would have been subject to taxation under 27 4 this section had it been in effect for such calendar year. 27 5 The city council on its own motion, or in the case of a 27 6 municipal utility governed by a board of trustees under 27 7 chapter 388 upon a resolution of the board of trustees 27 8 requesting such action, may declare any transfer or part of 27 9 such transfer to be exempt from the transfer replacement tax 27 10 under this section. Such rates shall be calculated and 27 11 reported to the director on or before August 31 of each tax 27 12 year. 27 13 5. A municipal utility taxpayer is entitled to a credit 27 14 against the municipal natural gas transfer replacement tax 27 15 equal to the average amount of natural gas related transfers 27 16 made by such municipal utility taxpayer under section 384.89, 27 17 other than those transfers declared exempt from transfer 27 18 replacement tax by the city council, during the preceding five 27 19 calendar years. 27 20 6. Notwithstanding subsection 1, the natural gas delivery 27 21 tax rate applied to therms of natural gas delivered by a 27 22 taxpayer to utility property and facilities which are placed 27 23 in service on or after January 1, 1999, and which are owned by 27 24 or leased to and initially served by such taxpayer shall be 27 25 the natural gas delivery tax rate in effect for the natural 27 26 gas competitive service area principally served by such 27 27 utility property and facilities even though such utility 27 28 property and facilities may be physically located in another 27 29 natural gas competitive service area. 27 30 7. Delivery of natural gas to a city from such city's 27 31 municipal utility is not subject to the replacement delivery 27 32 tax imposed under subsection 1, paragraph "a", and subsection 27 33 2, provided such natural gas is used by the city for the 27 34 public purposes of the city. 27 35 Section 437A.5, subsection 2, does not apply to natural gas 28 1 consumed by a person, other than an electric company, natural 28 2 gas company, electric cooperative, or municipal utility, 28 3 acquired by means of facilities owned by or leased to such 28 4 person on January 1, 1999, which were physically attached to 28 5 pipelines that are not permitted pursuant to chapter 479 and 28 6 used by such person for the purpose of bypassing the local 28 7 natural gas company or municipal utility. 28 8 8. If, for any tax year after calendar year 1998, the 28 9 total taxable therms of natural gas required to be reported by 28 10 taxpayers pursuant to section 437A.8, subsection 1, paragraphs 28 11 "a" and "b", with respect to any natural gas competitive 28 12 service area increases or decreases by more than the threshold 28 13 percentage from the average of the base year amounts for that 28 14 natural gas competitive service area during the immediately 28 15 preceding five calendar years, the tax rate imposed under 28 16 subsection 1, paragraph "a", and subsection 2 for that tax 28 17 year shall be recalculated by the director for that natural 28 18 gas competitive service area so that the total of the 28 19 replacement natural gas delivery taxes required to be reported 28 20 pursuant to section 437A.8, subsection 1, paragraph "e", for 28 21 that natural gas competitive service area with respect to the 28 22 tax imposed under subsection 1, paragraph "a", and subsection 28 23 2 shall be as follows: 28 24 a. If the number of therms of natural gas required to be 28 25 reported increased by more than the threshold percentage, one 28 26 hundred two percent of such taxes required to be reported by 28 27 taxpayers for that natural gas competitive service area for 28 28 the immediately preceding tax year. 28 29 b. If the number of therms of natural gas required to be 28 30 reported decreased by more than the threshold percentage, 28 31 ninety-eight percent of such taxes required to be reported by 28 32 taxpayers for that natural gas competitive service area for 28 33 the immediately preceding tax year. 28 34 c. For purposes of paragraphs "a" and "b", in computing 28 35 the tax rate under subsection 1, paragraph "a", and subsection 29 1 2 for calendar year 1999, the director shall use the average 29 2 centrally assessed property tax liability allocated to natural 29 3 gas service computed for the natural gas competitive service 29 4 area pursuant to subsection 3, paragraph "a", in lieu of the 29 5 taxes required to be reported for that natural gas competitive 29 6 service area for the immediately preceding tax year. 29 7 The threshold percentage shall be determined annually and 29 8 shall be eight percent for any natural gas competitive service 29 9 area in which the average of the base year amounts for the 29 10 preceding five calendar years does not exceed two hundred 29 11 fifty million therms, and ten percent for all other natural 29 12 gas competitive service areas. 29 13 Recalculation of a natural gas delivery tax rate, if 29 14 required, shall be made and the new rate published in the Iowa 29 15 administrative bulletin by the director by no later than May 29 16 31 following the tax year. The director shall adjust the 29 17 tentative replacement tax imposed by subsection 1, paragraph 29 18 "a", and subsection 2 required to be shown on any affected 29 19 taxpayer's return pursuant to section 437A.8, subsection 1, 29 20 paragraph "e", to reflect the adjusted delivery tax rate for 29 21 the tax year, and report such adjustment to the affected 29 22 taxpayer on or before June 30 following the tax year. The new 29 23 natural gas delivery tax rate shall apply prospectively, until 29 24 such time as further adjustment is required. 29 25 For purposes of this subsection, "base year amount" means 29 26 for calendar years prior to tax year 1999, the sum of the 29 27 therms of natural gas delivered to consumers within a natural 29 28 gas competitive service area by the taxpayer principally 29 29 serving such natural gas competitive service area which would 29 30 have been subject to taxation under this section had this 29 31 section been in effect for those years; and for tax years 29 32 after calendar year 1998, the taxable therms of natural gas 29 33 required to be reported by taxpayers pursuant to section 29 34 437A.8, subsection 1, paragraphs "a" and "b", with respect to 29 35 any natural gas competitive service area. 30 1 9. The natural gas delivery tax rate in effect for each 30 2 natural gas competitive service area shall be published by the 30 3 director in the Iowa administrative bulletin on or before 30 4 November 30, 1999, and annually after that date, during the 30 5 last quarter of the tax year. 30 6 Sec. 7. NEW SECTION. 437A.6 REPLACEMENT TAX IMPOSED ON 30 7 ELECTRIC GENERATION. 30 8 1. A replacement generation tax of six hundredths of a 30 9 cent per kilowatt-hour of electricity generated within this 30 10 state during the tax year is imposed on every person 30 11 generating electricity, except electricity generated by the 30 12 following: 30 13 a. A low capacity factor electric power generating plant. 30 14 b. Facilities owned by or leased to a municipal utility 30 15 when devoted to public use and not held for pecuniary profit, 30 16 except facilities of a municipally owned electric utility held 30 17 under joint ownership or lease and facilities of an electric 30 18 power facility financed under chapter 28F. 30 19 c. Wind energy conversion property subject to section 30 20 427B.26. 30 21 d. Methane gas conversion property subject to section 30 22 427.1, subsection 29. 30 23 e. Facilities owned by or leased to a state university or 30 24 university of science and technology, to the extent 30 25 electricity generated by such facilities is consumed 30 26 exclusively by such state university or university of science 30 27 and technology. 30 28 f. On-site facilities wholly owned by or leased in their 30 29 entirety to a self-generator. 30 30 2. For purposes of this section, if a generation facility 30 31 is jointly owned or leased, the taxpayer shall compute the 30 32 number of kilowatt-hours of electricity subject to the 30 33 replacement generation tax by multiplying the taxpayer's 30 34 percentage interest in the jointly held generation facility by 30 35 the number of kilowatt-hours of electricity generated. 31 1 Sec. 8. NEW SECTION. 437A.7 REPLACEMENT TAX IMPOSED ON 31 2 ELECTRIC TRANSMISSION. 31 3 1. A replacement transmission tax is imposed on every 31 4 person owning or leasing transmission lines within this state 31 5 and shall be equal to the sum of all of the following: 31 6 a. Five hundred fifty dollars per pole mile of 31 7 transmission line owned or leased by the taxpayer not 31 8 exceeding one hundred kilovolts. 31 9 b. Three thousand dollars per pole mile of transmission 31 10 line owned or leased by the taxpayer greater than one hundred 31 11 kilovolts but not exceeding one hundred fifty kilovolts. 31 12 c. Seven hundred dollars per pole mile of transmission 31 13 line owned or leased by the taxpayer greater than one hundred 31 14 fifty kilovolts but not exceeding three hundred kilovolts. 31 15 d. Seven thousand dollars per pole mile of transmission 31 16 line owned or leased by the taxpayer greater than three 31 17 hundred kilovolts. 31 18 The replacement transmission tax shall be calculated on the 31 19 basis of pole miles of transmission line owned or leased by 31 20 the taxpayer on the last day of the tax year. 31 21 2. The following shall not be subject to the replacement 31 22 transmission tax: 31 23 a. Transmission lines owned by or leased to a municipal 31 24 utility when devoted to public use and not for pecuniary 31 25 profit, except transmission lines of a municipally owned 31 26 electric utility held under joint ownership and transmission 31 27 lines of an electric power facility financed under chapter 31 28 28F. 31 29 b. Transmission lines owned by or leased to a lessor when 31 30 the lessee or sublessee of such transmission lines is subject 31 31 to the replacement transmission tax. 31 32 c. Any electric cooperative which owns, leases, or owns 31 33 and leases in total more than fifty pole miles and less than 31 34 seven hundred fifty pole miles of transmission lines in this 31 35 state. Chapter 437 shall apply to such electric cooperatives. 32 1 d. Transmission lines owned by or leased to a state 32 2 university or university of science and technology, provided 32 3 such transmission lines are used exclusively for the 32 4 transmission of electricity consumed by such state university 32 5 or university of science and technology. 32 6 e. Transmission lines owned by or leased to a person, 32 7 other than a public utility, for which a franchise is not 32 8 required under chapter 478. 32 9 3. For purposes of this section, if a transmission line is 32 10 jointly owned or leased, the taxpayer shall compute the number 32 11 of pole miles subject to the replacement transmission tax by 32 12 multiplying the taxpayer's percentage interest in the jointly 32 13 held transmission lines by the number of pole miles of such 32 14 lines. 32 15 Sec. 9. NEW SECTION. 437A.8 RETURN AND PAYMENT 32 16 REQUIREMENTS – RATE ADJUSTMENTS. 32 17 1. Each taxpayer, on or before February 28 following a tax 32 18 year, shall file with the director a return including, but not 32 19 limited to, the following information: 32 20 a. The total taxable kilowatt-hours of electricity 32 21 delivered by the taxpayer to consumers within each electric 32 22 competitive service area during the tax year, and the total 32 23 taxable therms of natural gas delivered by the taxpayer to 32 24 consumers within each natural gas competitive service area 32 25 during the tax year. 32 26 b. The total kilowatt-hours of electricity consumed by the 32 27 taxpayer within each electric competitive service area during 32 28 the tax year subject to tax under section 437A.4, subsection 32 29 2, and the total therms of natural gas consumed by the 32 30 taxpayer within each natural gas competitive service area 32 31 during the tax year subject to tax under section 437A.5, 32 32 subsection 2. 32 33 c. The total taxable kilowatt-hours of electricity 32 34 generated by the taxpayer in Iowa during the tax year. 32 35 d. The total taxable pole miles of electric transmission 33 1 lines in Iowa, by kilovolt, owned or leased by the taxpayer on 33 2 the last day of the tax year. 33 3 e. The tentative replacement taxes imposed by section 33 4 437A.4, subsection 1, paragraph "a", section 437A.4, 33 5 subsection 2, section 437A.5, subsection 1, paragraph "a", 33 6 section 437A.5, subsection 2, and sections 437A.6 and 437A.7, 33 7 due for the tax year. 33 8 f. For purposes of a municipal utility which is a member 33 9 of a municipal electric cooperative association, the 33 10 occurrence on or before September 1 of the preceding calendar 33 11 year of an event described in section 437A.4, subsection 9, 33 12 paragraph "a" or "b", and the date on which the one-hundred- 33 13 eighty-day requirement under such paragraph was met. 33 14 2. Each taxpayer subject to a municipal transfer 33 15 replacement tax, on or before February 28 following a tax 33 16 year, shall file with the chief financial officer of each city 33 17 located within an electric or natural gas competitive service 33 18 area served by a municipal utility as of January 1, 1999, a 33 19 return including, but not limited to, the following 33 20 information: 33 21 a. The total taxable kilowatt-hours of electricity 33 22 delivered by the taxpayer within each electric competitive 33 23 service area described in section 437A.4, subsection 4, during 33 24 the tax year and the total taxable therms of natural gas 33 25 delivered by the taxpayer within each natural gas competitive 33 26 service area described in section 437A.5, subsection 4, during 33 27 the tax year. 33 28 b. For a municipal utility taxpayer, the total transfers 33 29 made by the taxpayer under section 384.89 within each 33 30 competitive service area during the preceding calendar year, 33 31 allocated between electric-related transfers and natural gas- 33 32 related transfers and total credits described in sections 33 33 437A.4, subsection 5, and 437A.5, subsection 5. 33 34 c. The transfer replacement taxes imposed by sections 33 35 437A.4, subsection 1, paragraph "b", and 437A.5, subsection 1, 34 1 paragraph "b", due for the tax year. 34 2 3. A return shall be signed by an officer, or other person 34 3 duly authorized by the taxpayer, and must be certified as 34 4 correct and in accordance with forms and rules prescribed by 34 5 the director in the case of a return filed pursuant to 34 6 subsection 1, and in accordance with forms and rules 34 7 prescribed by the chief financial officer of the city in the 34 8 case of a return filed pursuant to subsection 2. 34 9 4. At the time of filing the return required by subsection 34 10 1 with the director, the taxpayer shall calculate the 34 11 tentative replacement tax due for the tax year. The director 34 12 shall compute any adjustments to the replacement tax required 34 13 by subsection 7 and by section 437A.4, subsection 8, and 34 14 section 437A.5, subsection 8, and notify the taxpayer of any 34 15 such adjustments in accordance with the requirements of such 34 16 provisions. The director and the department of management 34 17 shall compute the allocation of replacement taxes among local 34 18 taxing districts and report such allocations to county 34 19 treasurers pursuant to section 437A.15. Based on such 34 20 allocations, the treasurer of each county shall notify each 34 21 taxpayer on or before August 31 following a tax year of its 34 22 replacement tax obligation to the county treasurer. On or 34 23 before September 30, 2000, and on or before September 30 of 34 24 each subsequent year, the taxpayer shall remit to the county 34 25 treasurer of each county to which such replacement tax is 34 26 allocated pursuant to section 437A.15, one-half of the 34 27 replacement tax so allocated, and on or before the succeeding 34 28 March 31, the taxpayer shall remit to the county treasurers 34 29 the remaining replacement tax so allocated. If notification 34 30 of a taxpayer's replacement tax obligation is not mailed by a 34 31 county treasurer on or before August 31 following a tax year, 34 32 such taxpayer shall have thirty days from the date the 34 33 notification is mailed to remit one-half of the replacement 34 34 tax otherwise required by this subsection to be remitted to 34 35 such county treasurer on or before September 30. If a 35 1 taxpayer fails to timely remit replacement taxes as provided 35 2 in this subsection, the county treasurer of each affected 35 3 county shall notify the director of such failure. 35 4 5. At the time of filing the return required by subsection 35 5 2, the taxpayer shall calculate the municipal transfer 35 6 replacement tax due for the tax year. Municipal transfer 35 7 replacement taxes shall be paid to the chief financial officer 35 8 of the city to which the taxes are allocated at such time and 35 9 place as directed by the city council. 35 10 6. Notwithstanding subsections 1 through 5, a taxpayer 35 11 shall not be required to file a return otherwise required by 35 12 this section or remit any replacement tax for any tax year in 35 13 which the taxpayer's replacement tax liability before credits 35 14 is three hundred dollars or less. 35 15 7. Following the determination of electric and natural gas 35 16 delivery tax rates by the director pursuant to section 437A.4, 35 17 subsection 3, and section 437A.5, subsection 3, if an 35 18 adjustment resulting from a taxpayer appeal is made to taxes 35 19 levied and paid by a taxpayer with respect to any of the 35 20 assessment years 1993 through 1997 used in determining such 35 21 rates, the director shall recalculate the delivery tax rate 35 22 for any affected electric or natural gas competitive service 35 23 area to reflect the impact of such adjustment as if such 35 24 adjustment had been reflected in the initial determination of 35 25 average centrally assessed property tax liability allocated to 35 26 electric or natural gas service pursuant to section 437A.4, 35 27 subsection 3, paragraph "a", and section 437A.5, subsection 3, 35 28 paragraph "a". Rate recalculations shall be made and 35 29 published in the Iowa administrative bulletin by the director 35 30 on or before March 31 following the calendar year in which a 35 31 final determination of the adjustment is made. Taxpayers 35 32 shall report to the director any increase or decrease in the 35 33 tentative replacement tax required to be shown to be due 35 34 pursuant to subsection 1, paragraph "e", for any tax year with 35 35 the return for the year in which the recalculated tax rates 36 1 which gave rise to the adjustment are published in the Iowa 36 2 administrative bulletin. The director and the department of 36 3 management shall redetermine the allocation of replacement 36 4 taxes pursuant to section 437A.15 for each affected tax year. 36 5 If a taxpayer has overpaid replacement taxes, the overpayment 36 6 shall be reported by the director to such taxpayer and to the 36 7 appropriate county treasurers and shall be a credit against 36 8 the replacement taxes owed by such taxpayer for the year in 36 9 which the recalculated rates which gave rise to the 36 10 overpayment are published in the Iowa administrative bulletin. 36 11 If a taxpayer has overpaid centrally assessed property taxes 36 12 for assessment years prior to tax year 1999, such overpayment 36 13 shall be a credit against replacement taxes owed by such 36 14 taxpayer for the year in which the overpayment is determined. 36 15 Unused credits may be carried forward and used to reduce 36 16 future replacement tax liabilities until exhausted. 36 17 Sec. 10. NEW SECTION. 437A.9 FAILURE TO FILE RETURN – 36 18 INCORRECT RETURN. 36 19 1. As soon as practicable after a return required by 36 20 section 437A.8, subsection 1, is filed, and in any event 36 21 within three years after such return is filed, the director 36 22 shall examine the return, determine the tax due if the return 36 23 is found to be incorrect, and give notice to the taxpayer of 36 24 the determination as provided in subsection 2. The period for 36 25 the examination and determination of the correct amount of tax 36 26 is unlimited in the case of a false or fraudulent return made 36 27 with the intent to evade any tax or in the case of a failure 36 28 to file a return. The chief financial officer of a city shall 36 29 have the same authority as is granted to the director under 36 30 this section with respect to a return filed pursuant to 36 31 section 437A.8, subsection 2. 36 32 2. If a return required by section 437.8, subsection 1, is 36 33 not filed, or if such return when filed is incorrect or 36 34 insufficient and the taxpayer fails to file a corrected or 36 35 sufficient return within twenty days after such return is 37 1 required by notice from the director, the director shall 37 2 determine the amount of tax due from information as the 37 3 director may be able to obtain and, if necessary, may estimate 37 4 the tax due on the basis of external indices. The director 37 5 shall give notice of the determination to the taxpayer liable 37 6 for the tax and to the county treasurers to whom the tax is 37 7 owed. The determination shall fix the tax unless the taxpayer 37 8 against whom it is levied, within sixty days after notice of 37 9 the determination, applies to the director for a hearing. At 37 10 the hearing evidence may be offered to support the 37 11 determination or to prove that it is incorrect. After the 37 12 hearing the director shall give notice of the decision to the 37 13 person liable for the tax and to the county treasurers to whom 37 14 the tax is owed. 37 15 3. The three-year period of limitation provided in 37 16 subsection 1 may be extended by the taxpayer by signing a 37 17 waiver agreement form provided by the department. The 37 18 agreement shall stipulate the period of extension and the tax 37 19 period to which the extension applies. The agreement shall 37 20 also provide that a claim for refund may be filed by the 37 21 taxpayer at any time during the period of extension. 37 22 Sec. 11. NEW SECTION. 437A.10 JUDICIAL REVIEW. 37 23 1. Judicial review of the actions of the director may be 37 24 sought pursuant to chapter 17A, the Iowa administrative 37 25 procedure Act. 37 26 2. For cause and upon a showing by the director that 37 27 collection of the tax in dispute is in doubt, the court may 37 28 order the petitioner to file with the clerk of the district 37 29 court a bond for the use of the appropriate local taxing 37 30 districts, with sureties approved by the clerk of the district 37 31 court, in the amount of the tax appealed from, conditioned 37 32 upon the performance by the petitioner of any orders of the 37 33 court. 37 34 3. An appeal may be taken by the taxpayer or the director 37 35 to the supreme court irrespective of the amount involved. 38 1 4. A person aggrieved by a decision of the chief financial 38 2 officer of a city under this chapter may seek review by writ 38 3 of certiorari within thirty days of the decision sought to be 38 4 reviewed. 38 5 Sec. 12. NEW SECTION. 437A.11 LIEN – ACTIONS 38 6 AUTHORIZED. 38 7 Whenever a taxpayer who is liable to pay a tax imposed by 38 8 subchapter 2 refuses or neglects to pay such tax, the amount, 38 9 including any interest, penalty, or addition to such tax, 38 10 together with the costs that may accrue, shall be a lien in 38 11 favor of the chief financial officer of the city or the county 38 12 treasurer to which the tax is owed upon all property and 38 13 rights to property, whether real or personal, belonging to the 38 14 taxpayer. The lien shall be prior to and superior over all 38 15 subsequent liens upon any personal property within this state, 38 16 or right to such personal property, belonging to the taxpayer, 38 17 without the necessity of recording the lien. The requirement 38 18 for recording, as applied to the tax imposed by subchapter 2, 38 19 shall apply only to a lien upon real property. The lien may 38 20 be preserved against subsequent mortgagees, purchasers, or 38 21 judgment creditors, for value and without notice of the lien, 38 22 on any real property situated in a county, by the county 38 23 treasurer to which replacement tax is owed by filing with the 38 24 recorder of the county in which the real property is located a 38 25 notice of the lien. For purposes of the replacement tax 38 26 collected by a city, the lien may be preserved against 38 27 subsequent mortgagees, purchasers, or judgment creditors, for 38 28 value and without notice of the lien, on any real property 38 29 situated in the county, by the chief financial officer of the 38 30 city to which replacement tax is owed by filing with the 38 31 recorder of the county in which the real property is located a 38 32 notice of the lien. 38 33 The county recorder of each county shall prepare and keep 38 34 in the recorder's office a book to be known as the index of 38 35 replacement tax liens, so ruled as to show in appropriate 39 1 columns under the names of taxpayers arranged alphabetically, 39 2 all of the following: 39 3 1. The name of the taxpayer. 39 4 2. The name of the county treasurer and county or the name 39 5 of the chief financial officer and city as claimant. 39 6 3. Time the notice of lien was received. 39 7 4. Date of notice. 39 8 5. Amount of lien then due. 39 9 6. Date of assessment. 39 10 7. Date when the lien is satisfied. 39 11 The recorder shall endorse on each notice of lien the day, 39 12 hour, and minute when received and preserve such notice, and 39 13 shall promptly record the lien in the manner provided for 39 14 recording real estate mortgages. The lien is effective from 39 15 the time of the indexing of the lien. 39 16 The county treasurer or chief financial officer of the city 39 17 shall pay a recording fee as provided in section 331.604, for 39 18 the recording of the lien, or for its satisfaction. 39 19 Upon the payment of the replacement tax as to which a 39 20 county treasurer or chief financial officer of a city has 39 21 filed notice with a county recorder, the county treasurer or 39 22 chief financial officer of the city shall promptly file with 39 23 the recorder a satisfaction of the replacement tax. The 39 24 recorder shall enter the satisfaction on the notice on file in 39 25 the recorder's office and indicate that fact on the index. 39 26 Section 445.3 applies with respect to the replacement taxes 39 27 and penalties imposed by this chapter, except for the 39 28 provisions limiting the commencement of actions. 39 29 Sec. 13. NEW SECTION. 437A.12 SERVICE OF NOTICE. 39 30 1. A notice authorized or required under this chapter may 39 31 be given by mailing the notice to the taxpayer, addressed to 39 32 the taxpayer at the address given in the last return filed by 39 33 the taxpayer pursuant to this chapter, or if no return has 39 34 been filed, then to the most recent address of the taxpayer 39 35 obtainable. The mailing of the notice is presumptive evidence 40 1 of the receipt of the notice by the taxpayer to whom the 40 2 notice is addressed. A period of time within which some 40 3 action must be taken for which notice is provided under this 40 4 section commences to run from the date of mailing of the 40 5 notice. 40 6 2. There is no limitation for the enforcement of a civil 40 7 remedy pursuant to any proceeding or action taken to levy, 40 8 appraise, assess, determine, or enforce the collection of any 40 9 tax or penalty due under this chapter. 40 10 Sec. 14. NEW SECTION. 437A.13 PENALTIES – OFFENSES – 40 11 LIMITATION. 40 12 1. A taxpayer is subject to the penalty provisions in 40 13 section 421.27 with respect to any replacement tax due under 40 14 this chapter. A taxpayer shall also pay interest on the 40 15 delinquent replacement tax at the rate in effect under section 40 16 421.7 for each month computed from the date the payment was 40 17 due, counting each fraction of a month as an entire month. 40 18 The penalty and interest shall be paid to the county 40 19 treasurer, or in the case of penalty and interest associated 40 20 with a municipal transfer replacement tax to the city 40 21 financial officer, and shall be disposed of in the same manner 40 22 as other receipts under this chapter. Unpaid penalties and 40 23 interest may be enforced in the same manner as provided for 40 24 unpaid replacement tax under this chapter. 40 25 2. A taxpayer, or officer, member, or employee of the 40 26 taxpayer, who willfully attempts to evade the replacement tax 40 27 imposed or the payment of the replacement tax is guilty of a 40 28 class "D" felony. 40 29 3. The issuance of a certificate by the director or a 40 30 county treasurer stating that a replacement tax has not been 40 31 paid, that a return has not been filed, or that information 40 32 has not been supplied pursuant to this chapter is prima facie 40 33 evidence of such failure. 40 34 4. A taxpayer, or officer, member, or employee of the 40 35 taxpayer, required to pay a replacement tax, or required to 41 1 make, sign, or file an annual return or supplemental return, 41 2 who willfully makes a false or fraudulent annual return, or 41 3 who willfully fails to pay at least ninety percent of the 41 4 replacement tax or willfully fails to make, sign, or file the 41 5 annual return, as required, is guilty of a fraudulent 41 6 practice. 41 7 5. For purposes of determining the place of trial for a 41 8 violation of this section, the situs of an offense is in the 41 9 county of the residence of the taxpayer, officer, member, or 41 10 employee of the taxpayer charged with the offense, unless the 41 11 taxpayer, officer, member, or employee of the taxpayer is a 41 12 nonresident of this state or the residence cannot be 41 13 established, in which event the situs of the offense is in 41 14 Polk county. 41 15 6. Prosecution for an offense specified in this section 41 16 shall be commenced within six years after the commission of 41 17 the offense. 41 18 Sec. 15. NEW SECTION. 437A.14 CORRECTION OF ERRORS – 41 19 REFUNDS OR CREDITS OF REPLACEMENT TAX PAID – INFORMATION 41 20 CONFIDENTIAL – PENALTY. 41 21 1. a. If an amount of replacement tax, penalty, or 41 22 interest has been paid which was not due under this chapter, a 41 23 city's chief financial officer or county treasurer to whom 41 24 such erroneous payment was made shall do one of the following: 41 25 (1) Credit the amount of the erroneous payment against any 41 26 replacement tax due, or to become due, from the taxpayer on 41 27 the books of the city or county. 41 28 (2) Refund the amount of the erroneous payment to the 41 29 taxpayer. 41 30 b. Claims for refund or credit of replacement taxes paid 41 31 shall be filed with the director. A claim for refund or 41 32 credit that is not filed with the director within three years 41 33 after the replacement tax payment upon which a refund or 41 34 credit is claimed became due, or one year after the 41 35 replacement tax payment was made, whichever time is later, 42 1 shall not be allowed. A claim for refund or credit of tax 42 2 alleged to be unconstitutional not filed with the director 42 3 within ninety days after the replacement tax payment upon 42 4 which a refund or credit is claimed became due shall not be 42 5 allowed. As a precondition for claiming a refund or credit of 42 6 alleged unconstitutional taxes, such taxes must be paid under 42 7 written protest which specifies the particulars of the alleged 42 8 unconstitutionality. Claims for refund or credit may only be 42 9 made by, and refunds or credits may only be made to, the 42 10 person responsible for paying the replacement tax, or such 42 11 person's successors. The director shall notify affected 42 12 county treasurers of the acceptance or denial of any refund 42 13 claim. Section 421.10 applies to claims denied by the 42 14 director. 42 15 2. It is unlawful for any present or former officer or 42 16 employee of the state to divulge or to make known in any 42 17 manner to any person the kilowatt-hours of electricity or 42 18 therms of natural gas delivered by a taxpayer in a competitive 42 19 service area disclosed on a tax return, return information, or 42 20 investigative or audit information. A person who violates 42 21 this section is guilty of a serious misdemeanor. If the 42 22 offender is an officer or employee of the state, such person, 42 23 in addition to any other penalty, shall also be dismissed from 42 24 office or discharged from employment. This section does not 42 25 prohibit turning over to duly authorized officers of the 42 26 United States or tax officials of other states such kilowatt- 42 27 hours or therms pursuant to agreement between the director and 42 28 the secretary of the treasury of the United States or the 42 29 secretary's delegate or pursuant to a reciprocal agreement 42 30 with another state. 42 31 3. Unless otherwise expressly permitted by a section 42 32 referencing this chapter, the kilowatt-hours of electricity or 42 33 therms of natural gas delivered by a taxpayer in a competitive 42 34 service area shall not be divulged to any person or entity, 42 35 other than the taxpayer, the department, or the internal 43 1 revenue service for use in a matter unrelated to tax 43 2 administration. 43 3 This prohibition precludes persons or entities other than 43 4 the taxpayer, the department, or the internal revenue service 43 5 from obtaining such information from the department. A 43 6 subpoena, order, or process which requires the department to 43 7 produce such information to a person or entity, other than the 43 8 taxpayer, the department, or internal revenue service, for use 43 9 in a nontax proceeding is void. 43 10 4. Notwithstanding subsections 2 and 3, the chief 43 11 financial officer of any local taxing district and any 43 12 designee of such officer shall have access to any computations 43 13 made by the director pursuant to the provisions of this 43 14 chapter, and any tax return or other information used by the 43 15 director in making such computations, which affect the 43 16 replacement tax owed by any such taxpayer. 43 17 Notwithstanding this section, providing information 43 18 relating to the kilowatt-hours of electricity or therms of 43 19 natural gas delivered by a taxpayer in a competitive service 43 20 area to the task force established in section 437A.15, 43 21 subsection 7, or to the study committee established in section 43 22 476.6, subsection 23, is not a violation of this section. 43 23 5. Local taxing district employees are deemed to be 43 24 officers and employees of the state for purposes of subsection 43 25 2. 43 26 6. Claims for refund or credit of municipal transfer 43 27 replacement tax shall be filed with the appropriate city's 43 28 chief financial officer. Subsection 1 applies with respect to 43 29 the transfer replacement tax and the city's chief financial 43 30 officer shall have the same authority as is granted to the 43 31 director under this section with respect to a return filed 43 32 pursuant to section 437A.8, subsection 2. 43 33 7. Claims for refund or credit of special utility property 43 34 tax levies shall be filed with the appropriate county 43 35 treasurer. Subsection 1 applies with respect to the special 44 1 utility property tax levy and the county treasurer shall have 44 2 the same authority as is granted to the director under this 44 3 section. 44 4 Sec. 16. NEW SECTION. 437A.15 ALLOCATION OF REVENUE. 44 5 1. The director and the department of management shall 44 6 compute the allocation of all replacement tax revenues other 44 7 than transfer replacement tax revenues among the local taxing 44 8 districts in accordance with this section and shall report 44 9 such allocation by local taxing districts to the county 44 10 treasurers on or before August 15 following a tax year. 44 11 2. The director shall determine and report to the 44 12 department of management the total replacement taxes to be 44 13 collected from each taxpayer for the tax year on or before 44 14 July 30 following such tax year. 44 15 3. All replacement taxes owed by a taxpayer shall be 44 16 allocated among the local taxing districts in which such 44 17 taxpayer's property is located in accordance with a general 44 18 allocation formula determined by the department of management 44 19 on the basis of general property tax equivalents. General 44 20 property tax equivalents shall be determined by applying the 44 21 levy rates reported by each local taxing district to the 44 22 department of management on or before June 30 following a tax 44 23 year to the assessed value of taxpayer property allocated to 44 24 each such local taxing district as adjusted and reported to 44 25 the department of management in such tax year by the director 44 26 pursuant to section 437A.19, subsection 2. The general 44 27 allocation formula for a tax year shall allocate to each local 44 28 taxing district that portion of the replacement taxes owed by 44 29 each taxpayer which bears the same ratio as such taxpayer's 44 30 general property tax equivalents for each local taxing 44 31 district bears to such taxpayer's total general property tax 44 32 equivalents for all local taxing districts in Iowa. 44 33 4. On or before August 31 following tax years 1999, 2000, 44 34 and 2001, each county treasurer shall compute a special 44 35 utility property tax levy or tax credit for each taxpayer for 45 1 which a replacement tax liability for each such tax year is 45 2 reported to the county treasurer pursuant to subsection 1, and 45 3 shall notify the taxpayer of the amount of such tax levy or 45 4 tax credit. The amount of the special utility property tax 45 5 levy or credit shall be determined for each taxpayer by the 45 6 county treasurer by comparing the taxpayer's total replacement 45 7 tax liability allocated to taxing districts in the county 45 8 pursuant to this section with the anticipated tax revenues 45 9 from the taxpayer for all taxing districts in the county. If 45 10 the taxpayer's total replacement tax liability allocated to 45 11 taxing districts in the county is less than the anticipated 45 12 tax revenues from the taxpayer for all taxing districts in the 45 13 county, the county treasurer shall levy a special utility 45 14 property tax equal to the shortfall which shall be added to 45 15 and collected with the replacement tax owed by the taxpayer to 45 16 the county treasurer for the tax year pursuant to section 45 17 437A.8, subsection 4. If the taxpayer's total replacement tax 45 18 liability allocated to taxing districts in the county exceeds 45 19 the anticipated tax revenues from the taxpayer for all taxing 45 20 districts in the county, the county treasurer shall issue a 45 21 credit to the taxpayer which shall be applied to reduce the 45 22 taxpayer's replacement tax liability to the county treasurer 45 23 for the tax year. If the taxpayer's total replacement tax 45 24 liability allocated to taxing districts in the county equals 45 25 the anticipated tax revenues from the taxpayer for all taxing 45 26 districts in the county, no levy or credit is required. 45 27 Replacement tax liability for purposes of this subsection 45 28 means replacement tax liability before credits allowed by 45 29 section 437A.8, subsection 7. A recalculation of a special 45 30 utility property tax levy or credit shall not be made as a 45 31 result of a subsequent recalculation of replacement tax 45 32 liability under section 437A.8, subsection 7, or adjustment to 45 33 assessed value under section 437A.19, subsection 2, paragraph 45 34 "f". "Anticipated tax revenues from a taxpayer" means the 45 35 product of the total levy rates imposed by the taxing 46 1 districts and the value of taxpayer property allocated to the 46 2 taxing districts and reported to the county auditor. Special 46 3 utility property tax levies and credits shall be treated as 46 4 replacement taxes for purposes of section 437A.11. 46 5 It is the intent of the general assembly that the general 46 6 assembly evaluate the impact of the imposition of the 46 7 replacement tax for purposes of determining whether this 46 8 subsection shall remain in effect and whether a determination 46 9 shall be made as to the necessity of a recalculation as 46 10 provided in this subsection for tax years beginning after tax 46 11 year 2000. 46 12 5. The replacement tax, as adjusted by any special utility 46 13 property tax levy or credit and remitted to a county treasurer 46 14 by each taxpayer, shall be treated as a property tax when 46 15 received and shall be disposed of by the county treasurer as 46 16 taxes on real estate. Notwithstanding the allocation 46 17 provisions of this section, nothing in this section shall deny 46 18 any affected taxing entity, as defined in section 403.17, 46 19 subsection 1, which has enacted an ordinance or entered into 46 20 an agreement for the division and allocation of taxes 46 21 authorized under section 403.19 and under which ordinance or 46 22 agreement the taxes collected in respect of properties owned 46 23 by any of the taxpayers remitting replacement taxes pursuant 46 24 to the provisions of this chapter are being divided and 46 25 allocated, the right to receive its share of the replacement 46 26 tax revenues collected for any year which would otherwise be 46 27 paid to such affected taxing entity under the terms of any 46 28 such ordinance or agreement had this chapter not been enacted. 46 29 To the extent that adjustment must be made to the allocation 46 30 described in this section to give effect to the terms of such 46 31 ordinances or agreements, the department of management and the 46 32 county treasurer shall make such adjustments. 46 33 6. In lieu of the adjustment provided for in subsection 5, 46 34 the assessed value of property described in section 403.19, 46 35 subsection 1, may be reduced by the city or county by the 47 1 amount of the taxable value of the property described in 47 2 section 437A.16 included in such area on January 1, 1997, 47 3 pursuant to amendment of the ordinance adopted by such city or 47 4 county pursuant to section 403.19. 47 5 7. On or before July 1, 1998, the department of 47 6 management, in consultation with the department of revenue and 47 7 finance, shall initiate and coordinate the establishment of a 47 8 task force and provide staffing assistance to the task force. 47 9 It is the intent of the general assembly that the task force 47 10 include representatives of the department of management, 47 11 department of revenue and finance, electric companies, natural 47 12 gas companies, municipal utilities, electric cooperatives, 47 13 counties, cities, school boards, and industrial, commercial, 47 14 and residential consumers, and other appropriate stakeholders. 47 15 The task force shall study the effects of the replacement 47 16 tax on local taxing districts, consumers, and taxpayers and 47 17 the department of management shall report to the general 47 18 assembly by January 1 of each year through January 1, 2003, 47 19 the results of the study and the specific recommendations of 47 20 the task force for modifications to the replacement tax, if 47 21 any, which will further the purposes of tax neutrality for 47 22 local taxing districts, taxpayers, and consumers, consistent 47 23 with the stated purposes of this chapter. The department of 47 24 management shall also report to the legislative council by 47 25 November 15 of each year through 2002, the status of the task 47 26 force study and any recommendations. 47 27 Sec. 17. NEW SECTION. 437A.16 ASSESSMENT EXCLUSIVE. 47 28 All operating property and all other property that is 47 29 primarily and directly used in the production, generation, 47 30 transmission, or delivery of electricity or natural gas owned 47 31 by or leased to a person subject to taxation under this 47 32 chapter is exempt from taxation except as otherwise provided 47 33 by this chapter. This exemption shall not extend to taxes 47 34 imposed under chapters 437, 438, and 468, taxpayers described 47 35 in section 437A.8, subsection 6, or facilities or property 48 1 described in section 437A.6, subsection 1, paragraphs "a" 48 2 through "f", and section 437A.7, subsection 2. 48 3 Sec. 18. NEW SECTION. 437A.17 STATUTES APPLICABLE – 48 4 RATE CALCULATIONS. 48 5 1. The director shall administer and enforce the 48 6 replacement tax imposed by this chapter in the same manner as 48 7 provided in and subject to sections 422.68, 422.70, 422.71, 48 8 and 422.75. 48 9 2. The calculation of tax rates and adjustments to such 48 10 rates by the director pursuant to this chapter do not 48 11 constitute rulemaking subject to the provisions of chapter 48 12 17A. 48 13 SUBCHAPTER 3 48 14 STATEWIDE PROPERTY TAX 48 15 Sec. 19. NEW SECTION. 437A.18 TAX IMPOSITION. 48 16 An annual statewide property tax of three cents per one 48 17 thousand dollars of assessed value is imposed upon all 48 18 property described in section 437A.16 on the assessment date 48 19 of January 1. 48 20 Sec. 20. NEW SECTION. 437A.19 ADJUSTMENT TO ASSESSED 48 21 VALUE – REPORTING REQUIREMENTS. 48 22 1. a. A taxpayer whose property is subject to the 48 23 statewide property tax shall report to the director by July 1, 48 24 1999, and by May 1 of each subsequent tax year, on forms 48 25 prescribed by the director, the book value, as of the 48 26 beginning and end of the preceding calendar year, of all of 48 27 the following: 48 28 (1) The local amount of any major addition by local taxing 48 29 district. 48 30 (2) The statewide amount of any major addition without 48 31 notation of location. 48 32 (3) Any building in Iowa at acquisition cost of more than 48 33 ten million dollars which was originally placed in service by 48 34 the taxpayer prior to January 1, 1998, and which was 48 35 transferred or disposed of in the preceding calendar year, 49 1 without notation of location. 49 2 (4) Any electric power generating plant in Iowa at 49 3 acquisition cost of more than ten million dollars which was 49 4 originally placed in service by the taxpayer prior to January 49 5 1, 1998, and which was transferred or disposed of in the 49 6 preceding calendar year, without notation of location. 49 7 (5) All other taxpayer property without notation of 49 8 location. 49 9 (6) The local amount of any major addition eligible for 49 10 the urban revitalization exemption provided for in chapter 49 11 404, by situs. 49 12 b. For purposes of this section: 49 13 (1) "Book value" means acquisition cost less accumulated 49 14 depreciation determined under generally accepted accounting 49 15 principles. 49 16 (2) "Taxpayer property" means property described in 49 17 section 437A.16. 49 18 (3) "To dispose of" means to sell, abandon, decommission, 49 19 or retire an asset. 49 20 (4) "Transfer" means a transaction which results in a 49 21 change of ownership of taxpayer property and includes a 49 22 capital lease transaction. 49 23 c. For purposes of this subsection, "taxpayer" includes a 49 24 person who would have been a taxpayer in calendar year 1998 49 25 had the provisions of this chapter been in effect for the 1998 49 26 assessment year. 49 27 d. If a taxpayer owns or leases pursuant to a capital 49 28 lease less than the entire interest in a major addition, the 49 29 local amount and statewide amount, if any, of such major 49 30 addition shall be apportioned to the taxpayer on the basis of 49 31 its percentage interest in such major addition. 49 32 2. Beginning January 1, 1999, the assessed value of 49 33 taxpayer property shall be adjusted annually as provided in 49 34 this section. The director, with respect to each taxpayer, 49 35 shall do all of the following: 50 1 a. Adjust the assessed value of taxpayer property in each 50 2 local taxing district by the change in book value during the 50 3 preceding calendar year of the local amount of any major 50 4 addition reported within such local taxing district. 50 5 b. (1) Adjust the assessed value of taxpayer property in 50 6 each local taxing district by allocating the change in book 50 7 value during the preceding calendar year of the statewide 50 8 amount and all other taxpayer property described in subsection 50 9 1, paragraph "a", subparagraph (5), to the assessed value of 50 10 all taxpayer property in the state pro rata according to its 50 11 preadjustment value. 50 12 (2) If, during the preceding calendar year, a taxpayer 50 13 transferred an electric power generating plant to a taxpayer 50 14 who owned no other taxpayer property in this state as of the 50 15 end of such preceding calendar year, in lieu of the adjustment 50 16 provided in subparagraph (1), the director shall allocate the 50 17 transferee taxpayer's change in book value of the statewide 50 18 amount during such preceding calendar year, if any, among 50 19 local taxing districts in proportion to the allocation of the 50 20 transferor's assessed value among local taxing districts as of 50 21 the end of such preceding calendar year. 50 22 c. In the case of taxpayer property described in 50 23 subsection 1, paragraph "a", subparagraphs (3) and (4), 50 24 decrease the assessed value of taxpayer property in each local 50 25 taxing district by the taxable value of such property within 50 26 each such local taxing district on January 1, 1998. 50 27 d. In the event of a merger or consolidation of two or 50 28 more taxpayers, to determine the assessed value of the 50 29 surviving taxpayer, combine the assessed values of such 50 30 taxpayers immediately prior to the merger or consolidation. 50 31 e. In the event any taxpayer property is eligible for the 50 32 urban revitalization tax exemption described in chapter 404, 50 33 adjust the assessed value of taxpayer property within each 50 34 affected local taxing district to reflect such exemption. 50 35 f. In the event the base year assessed value of taxpayer 51 1 property is adjusted as a result of taxpayer appeals, reduce 51 2 the assessed value of taxpayer property in each local taxing 51 3 district to reflect such adjustment. The adjustment shall be 51 4 allocated in proportion to the allocation of the taxpayer's 51 5 assessed value among the local taxing districts determined 51 6 without regard to this adjustment. If an adjustment to the 51 7 base year assessed value of taxpayer property is finally 51 8 determined on or before September 30, 1999, it shall be 51 9 reflected in the January 1, 1999, assessed value. Otherwise, 51 10 any such adjustment shall be made as of January 1 of the year 51 11 following the date on which the adjustment is finally 51 12 determined. 51 13 In no event shall the adjustments set forth in this 51 14 subsection reduce the assessed value of taxpayer property in 51 15 any local taxing district below zero. 51 16 The director, on or before October 31, 1999, in the case of 51 17 January 1, 1999, assessed values, and on or before August 31 51 18 of each subsequent assessment year, shall report to the 51 19 department of management and to the auditor of each county the 51 20 adjusted assessed value of taxpayer property as of January 1 51 21 of such assessment year for each local taxing district. For 51 22 purposes of this subsection, the assessed value of taxpayer 51 23 property in each local taxing district subject to adjustment 51 24 under this section by the director means the assessed value of 51 25 such property as of the preceding January 1 as determined and 51 26 allocated among the local taxing districts by the director. 51 27 Nothing in this chapter shall be interpreted to authorize 51 28 local taxing districts to exclude from the calculation of levy 51 29 rates the adjusted assessed value of taxpayer property 51 30 reported to county auditors pursuant to this subsection. 51 31 Sec. 21. NEW SECTION. 437A.20 TAX EXEMPTIONS. 51 32 Except as provided in section 437A.16, all property tax 51 33 exemptions in the Code do not apply to property subject to the 51 34 statewide property tax unless such exemptions expressly refer 51 35 to the statewide property tax, except that if property was 52 1 exempt from property tax on January 1, 1999, such exemption 52 2 shall continue until the exemption expires, is phased out, or 52 3 is repealed. The property of a taxpayer who does not owe any 52 4 replacement tax is exempt from the statewide property tax for 52 5 the coinciding assessment year. 52 6 Sec. 22. NEW SECTION. 437A.21 RETURN AND PAYMENT 52 7 REQUIREMENTS. 52 8 1. Each electric company, natural gas company, electric 52 9 cooperative, municipal utility, and other person whose 52 10 property is subject to the statewide property tax shall file 52 11 with the director a return, on or before February 28 following 52 12 the assessment year, including, but not limited to, the 52 13 following information: 52 14 a. The assessed value of property subject to the statewide 52 15 property tax. 52 16 b. The amount of statewide property tax computed on such 52 17 assessed value. 52 18 2. The first return under subsection 1 is due on or before 52 19 February 28, 2000. 52 20 3. If an electric company, natural gas company, electric 52 21 cooperative, municipal utility, or person is not required to 52 22 file a statewide property tax return on or before February 28, 52 23 2000, but is required to file a return after such date, the 52 24 return shall be filed on or before the due date. This 52 25 subsection also applies in the event of a consolidation. 52 26 4. A return shall be signed by an officer, or other person 52 27 duly authorized by the taxpayer, and must be certified as 52 28 correct and in accordance with rules and forms prescribed by 52 29 the director. 52 30 5. At the time of filing the return with the director, the 52 31 taxpayer shall calculate the statewide property tax owed for 52 32 the assessment year and shall remit to the director the 52 33 statewide property tax required to be shown to be due on the 52 34 return. 52 35 Sec. 23. NEW SECTION. 437A.22 STATUTES APPLICABLE. 53 1 Sections 437A.9, 437A.10, 437A.12, 437A.13, and 437A.14, 53 2 subsection 1, are applicable to electric companies, natural 53 3 gas companies, electric cooperatives, municipal utilities, and 53 4 persons whose property is subject to the statewide property 53 5 tax. However, a required credit or refund of overpaid 53 6 statewide property tax pursuant to section 437A.14, subsection 53 7 1, as it applies to this subchapter, shall be made by the 53 8 director and not by city chief financial officers or county 53 9 treasurers. 53 10 Section 422.26 applies with respect to the statewide 53 11 property tax and penalties imposed by this chapter, except 53 12 that, as applied to any tax imposed by this chapter, the lien 53 13 provided shall be prior to and superior over all subsequent 53 14 liens upon any personal property within this state or right to 53 15 such personal property belonging to the taxpayer, without the 53 16 necessity of recording the lien as provided in section 422.26. 53 17 The requirement for recording, as applied to the statewide 53 18 property tax imposed by this chapter, shall apply only to a 53 19 lien upon real property. In order to preserve such lien 53 20 against subsequent mortgagees, purchasers, or judgment 53 21 creditors, for value and without notice of the lien, on any 53 22 real property situated in a county, the director shall file 53 23 with the recorder of the county in which the real property is 53 24 located a notice of the lien. 53 25 The county recorder of each county shall prepare and keep 53 26 in the recorder's office a book to be known as the index of 53 27 statewide property tax liens, so ruled as to show in 53 28 appropriate columns under the names of taxpayers arranged 53 29 alphabetically, all of the following: 53 30 1. The name of the taxpayer. 53 31 2. The name "State of Iowa" as claimant. 53 32 3. Time the notice of lien was received. 53 33 4. Date of notice. 53 34 5. Amount of lien then due. 53 35 6. Date of assessment. 54 1 7. Date when the lien is satisfied. 54 2 The recorder shall endorse on each notice of lien the day, 54 3 hour, and minute when received and preserve such notice, and 54 4 shall promptly record the lien in the manner provided for 54 5 recording real estate mortgages. The lien is effective from 54 6 the time of the indexing of the lien. 54 7 The director, from moneys appropriated to the department of 54 8 revenue and finance for this purpose, shall pay a recording 54 9 fee as provided in section 331.604 for the recording of the 54 10 lien, or for its satisfaction. 54 11 Upon the payment of the replacement tax as to which the 54 12 director has filed notice with a county recorder, the director 54 13 shall promptly file with the recorder a satisfaction of the 54 14 replacement tax. The recorder shall enter the satisfaction on 54 15 the notice on file in the recorder's office and indicate that 54 16 fact on the index. 54 17 Sec. 24. NEW SECTION. 437A.23 DEPOSIT OF TAX PROCEEDS. 54 18 All revenues received from imposition of the statewide 54 19 property tax shall be deposited in the general fund of the 54 20 state. Fifty percent of the revenues shall be available to 54 21 the department of management for salaries, support, services, 54 22 and equipment to administer the replacement tax. The balance 54 23 of the revenues shall be available to the department of 54 24 revenue and finance for salaries, support, services, and 54 25 equipment to administer and enforce the replacement tax and 54 26 the statewide property tax. 54 27 SUBCHAPTER 4 54 28 GENERAL PROVISIONS 54 29 Sec. 25. NEW SECTION. 437A.24 RECORDS. 54 30 Each electric company, natural gas company, electric 54 31 cooperative, municipal utility, and other person who is 54 32 subject to the replacement tax or the statewide property tax 54 33 shall maintain records associated with the replacement tax and 54 34 the assessed value of property subject to the statewide 54 35 property tax for a period of ten years following the later of 55 1 the original due date for filing a return pursuant to sections 55 2 437A.8 and 437A.21 in which such taxes are reported, or the 55 3 date on which either such return is filed. Such records shall 55 4 include those associated with any additions or dispositions of 55 5 property, and the allocation of such property among local 55 6 taxing districts. 55 7 Sec. 26. NEW SECTION. 437A.25 RULES. 55 8 The director of revenue and finance may adopt rules 55 9 pursuant to chapter 17A for the administration and enforcement 55 10 of this chapter. 55 11 Sec. 27. Section 257.3, subsection 1, Code 1997, is 55 12 amended by adding the following unnumbered paragraph: 55 13 NEW UNNUMBERED PARAGRAPH. Replacement taxes under chapter 55 14 437A shall be regarded as property taxes for purposes of this 55 15 chapter. 55 16 Sec. 28. Section 427.1, subsection 2, Code Supplement 55 17 1997, is amended to read as follows: 55 18 2. MUNICIPAL AND MILITARY PROPERTY. The property of a 55 19 county, township, city, school corporation, levee district, 55 20 drainage district or military company of the state of Iowa, 55 21 when devoted to public use and not held for pecuniary profit, 55 22 except property of a municipally owned electric utility held 55 23 under joint ownership and property of an electric power 55 24 facility financed under chapter 28F which shall be subject to 55 25assessment andtaxation underprovisions of chapters 428 and55 26437chapter 437A. The exemption for property owned by a city 55 27 or county also applies to property which is operated by a city 55 28 or county as a library, art gallery or museum, conservatory, 55 29 botanical garden or display, observatory or science museum, or 55 30 as a location for holding athletic contests, sports or 55 31 entertainment events, expositions, meetings or conventions, or 55 32 leased from the city or county for any such purposes. Food 55 33 and beverages may be served at the events or locations without 55 34 affecting the exemptions, provided the city has approved the 55 35 serving of food and beverages on the property if the property 56 1 is owned by the city or the county has approved the serving of 56 2 food and beverages on the property if the property is owned by 56 3 the county. 56 4 Sec. 29. Section 428.24, Code 1997, is amended to read as 56 5 follows: 56 6 428.24 PUBLIC UTILITY PLANTS. 56 7 The lands, buildings, machinery, and mains belonging to 56 8 individuals or corporations operating waterworks or gasworks 56 9 or pipelines; the lands, buildings, machinery, tracks, poles,56 10and wires belonging to individuals, corporations or electric56 11power agencies furnishing electric light or power; and the56 12lands, buildings, machinery, poles, wires, overhead56 13construction, tracks, cables, conduits, and fixtures belonging56 14to individuals or corporations operating railways by cable or56 15electricity, or operating elevated street railways;, except 56 16 those natural gas pipelines permitted pursuant to chapter 479, 56 17 shall be listed and assessed by the department of revenue and 56 18 finance. In the making of assessments of waterworks plants, 56 19 the value of any interest in the property assessed, of the 56 20 municipal corporation where it is situated, shall be deducted, 56 21 whether the interest is evidenced by stock, bonds, contracts, 56 22 or otherwise. 56 23 Sec. 30. Section 428.26, Code 1997, is amended to read as 56 24 follows: 56 25 428.26 PERSONAL PROPERTY. 56 26 All the personal property of such individuals and 56 27 corporations used or purchased by them for the purposes of 56 28 such gas or waterworks, electric light plants, electric or56 29cable railways, elevated street railways or street railways56 30operated by animal power, including the rolling stock of such56 31railways and street railways, and the animals belonging to56 32such street railways operated by animal power, other than 56 33 natural gas pipelines permitted pursuant to chapter 479, shall 56 34 be listed and assessed by the department of revenue and 56 35 finance. In the making of any such assessment of waterworks 57 1 plants, the value of any interest in the property so assessed, 57 2 of the municipal corporationwhereinin which thesame57 3 waterworks is situated, shall be deducted, whether such 57 4 interest be evidenced by stock, bonds, contracts, or 57 5 otherwise. 57 6 Sec. 31. Section 428.28, Code 1997, is amended to read as 57 7 follows: 57 8 428.28 ANNUAL REPORT BY UTILITY. 57 9 Every individual, copartnership, corporation, or 57 10 association operating for profit, waterworks or gasworks or 57 11 pipe lines, electric light or power plant, railways operated57 12by electricity, elevated street railways, shallother than 57 13 natural gas pipelines permitted pursuant to chapter 479, 57 14 annually on or beforethe first day ofMay 1 of each calendar 57 15 year, shall make a report on blanks to be provided by the 57 16 department of revenue and finance of all of the property owned 57 17 by such individual, copartnership, corporation, or association 57 18 within the incorporated limits of any city in the state, and 57 19 give such other information as the director of revenue and 57 20 finance shall require. 57 21 Every individual, copartnership, corporation, or 57 22 association which operates a public utility on a nonprofit 57 23 basis other than a utility subject to tax under chapter 437A, 57 24 as defined in section 428.24 shall annually, on or beforethe57 25first day ofMay 1 of each calendar year, make a report on 57 26 blanks to be provided by the department of revenue and finance 57 27 of all of the property owned by the individual, copartnership, 57 28 corporation, or association within the incorporated limits of 57 29 any city in the state, and give other information the director 57 30 of revenue and finance requires. 57 31 Sec. 32. Section 437.1, Code 1997, is amended by striking 57 32 the section and inserting in lieu thereof the following: 57 33 437.1 DEFINITIONS. 57 34 As used in this chapter, unless the context otherwise 57 35 requires: 58 1 1. "Company" means an electric cooperative referred to in 58 2 section 437A.7, subsection 2, paragraph "c". 58 3 2. "Electric cooperative" means an electric utility 58 4 provider formed or organized as an electric cooperative under 58 5 the laws of this state or elsewhere. 58 6 3. "Transmission lines" means electric lines and 58 7 associated facilities operating at thirty-four thousand five 58 8 hundred volts or higher voltage, and substations, 58 9 transformers, and associated facilities operated at thirty- 58 10 four thousand five hundred or more volts on the low voltage 58 11 side. 58 12 Sec. 33. Section 437.3, Code 1997, is amended to read as 58 13 follows: 58 14 437.3 VERIFICATION. 58 15 The verification of any statement required by law shall, in58 16the case of a person,be made bysuch person; in the case of a58 17corporation, by the president or secretary thereof; and in58 18case of a copartnership, association, or syndicate, bysome 58 19 member, officer, or agentthereofof the company having 58 20 knowledge of the facts. 58 21 Sec. 34. Section 438.1, Code 1997, is amended to read as 58 22 follows: 58 23 438.1 TAXATION PROCEDURE. 58 24 Every person, copartnership, association, corporation, or 58 25 syndicate engaged in the business of transporting or 58 26 transmitting gas, gasoline, oils, or motor fuels by means of 58 27 pipelines other than natural gas pipelines permitted pursuant 58 28 to chapter 479, whether such pipelines be owned or leased, 58 29 shall be taxed ashereinprovided in this chapter. 58 30 Sec. 35. Section 438.2, Code 1997, is amended to read as 58 31 follows: 58 32 438.2DEFINITIONSDEFINITION. 58 33The words "pipeline"Pipeline company", as used in this 58 34 chaptershall be deemed and construed to mean, means any 58 35 person, copartnership, association, corporation, or syndicate 59 1 that may own or operate or be engaged in operating or 59 2 utilizing pipelines, other than natural gas pipelines 59 3 permitted pursuant to chapter 479, for the purposes described 59 4 in section 438.1. 59 5 Sec. 36. Section 441.73, subsection 1, Code Supplement 59 6 1997, is amended to read as follows: 59 7 1. A litigation expense fund is created in the state 59 8 treasury. The litigation expense fund shall be used for the 59 9 payment of litigation expenses incurred by the state to defend 59 10 property valuations established by the director of revenue and 59 11 finance pursuant to section 428.24 and chapters 430A, 433, 59 12 434, 436, 437, 437A, and 438, and for the payment of 59 13 litigation expenses incurred by the state to defend the 59 14 imposition of replacement taxes and statewide property taxes 59 15 under chapter 437A. 59 16 Sec. 37. Section 476.6, Code 1997, is amended by adding 59 17 the following new subsections: 59 18 NEW SUBSECTION. 22. The costs of the replacement tax 59 19 imposed pursuant to chapter 437A shall be reflected in the 59 20 charges of utilities subject to rate regulation, in lieu of 59 21 the utilities' costs of property taxes. The imposition of the 59 22 replacement taxes pursuant to chapter 437A is not intended to 59 23 initiate any change in the rates and charges for the sale of 59 24 electricity, the sale of natural gas, or the transportation of 59 25 natural gas that is subject to regulation by the board and in 59 26 effect on the effective date of chapter 437A. 59 27 The cost of the replacement taxes imposed by chapter 437A 59 28 shall be allocated among and within customer classes in a 59 29 manner that will replicate the tax cost burden of the current 59 30 property tax on individual customers to the maximum extent 59 31 practicable. 59 32 Upon the restructuring of the electric industry in this 59 33 state so that individual consumers are given the right to 59 34 choose their electric suppliers, replacement tax costs shall 59 35 be assigned to the service corresponding to the individual 60 1 generation, transmission, and delivery taxes. In all other 60 2 respects, the allocation of the replacement tax costs among 60 3 and within the customer classes shall remain the same to the 60 4 maximum extent practicable. 60 5 Notwithstanding this subsection, the board may determine 60 6 the amount of replacement tax properly included in retail 60 7 rates subject to its jurisdiction. The board may determine 60 8 whether the base rates or some other form of rate is most 60 9 appropriate for recovery of the costs of the replacement tax, 60 10 subject to the requirement that utility rates be reasonable 60 11 and just. The board may also determine the appropriate 60 12 allocation of the tax. Any significant modification to rate 60 13 design relating to the replacement tax shall be made in a 60 14 manner consistent with this subsection unless made in a 60 15 contested case proceeding where the impact of such 60 16 modification on competition and consumer costs is considered. 60 17 NEW SUBSECTION. 23. On or before July 1, 2000, the 60 18 utilities board, in consultation with the department of 60 19 revenue and finance, shall initiate and coordinate the 60 20 establishment of a replacement tax study committee and provide 60 21 staffing assistance to the committee. It is the intent of the 60 22 general assembly that the committee include representatives of 60 23 the utilities board, department of revenue and finance, 60 24 department of management, investor-owned utilities, municipal 60 25 utilities, cooperative utilities, local governments, major 60 26 customer classes, and other stakeholders. 60 27 The committee shall study the effects of the replacement 60 28 tax on both restructuring and the development of competition 60 29 in the gas and electric industries in this state. The board 60 30 shall report to the general assembly by January 1 of each year 60 31 through 2003, the results of the study, and the committee's 60 32 recommendations as to whether the replacement tax, in its then 60 33 present form, should be continued, whether a different form of 60 34 taxation of electric and gas utilities should be adopted in 60 35 order to allow free and fair competition in the electric and 61 1 gas industries, and fair competitive prices for all classes of 61 2 consumers, whether a different basis for determination of the 61 3 generation, transmission, and delivery taxes should be adopted 61 4 or whether the relative share of the total replacement tax 61 5 burden imposed on each of the generation, transmission, and 61 6 delivery functions should be modified in order to allow free 61 7 and fair competition in the electric and gas industries, and 61 8 fair competitive prices for all classes of consumers, and 61 9 whether the replacement tax in its then present form, 61 10 appropriately accounts for the decline in value of electric 61 11 power generating plants. The replacement tax study committee 61 12 shall reconvene by January 1, 2006, to further study these 61 13 same issues, and the board shall report the results of the 61 14 study and the committee's recommendations to the general 61 15 assembly by January 1, 2008. 61 16 Upon recommendation of the committee, the board may 61 17 contract for services necessary to the implementation of this 61 18 subsection with persons who are not state employees, 61 19 including, but not limited to, facilitators, consultants, and 61 20 other experts required to assist the committee. The cost of 61 21 contracted services shall not be paid from appropriated funds, 61 22 but shall be assessed to entities paying replacement tax 61 23 pursuant to chapter 437A, subchapter 2, pro rata, based on the 61 24 amount of tax paid. 61 25 Sec. 38. SPECIAL REPORTING REQUIREMENTS. Within ninety 61 26 days of the effective date of this Act, each electric company, 61 27 electric cooperative not described in section 437A.7, 61 28 subsection 2, paragraph "c", municipal utility, and natural 61 29 gas company shall report to the director, by certified 61 30 statement subject to audit, the following information: 61 31 1. The entity's liability for centrally assessed property 61 32 tax, as defined in section 437A.3, subsection 2, allocated to 61 33 electric service for the assessment years 1993 through 1997 on 61 34 the basis of property tax payments made. 61 35 2. The entity's liability for centrally assessed property 62 1 tax, as defined in section 437A.3, subsection 2, allocated to 62 2 natural gas service for the assessment years 1993 through 1997 62 3 on the basis of property tax payments made. 62 4 3. The entity's total kilowatt-hours of electricity 62 5 generated which would have been subject to taxation under 62 6 section 437A.6 for the 1998 assessment year had such taxation 62 7 been in effect for assessment year 1998. Kilowatt-hours of 62 8 electricity generated by a facility which was jointly owned or 62 9 leased in assessment year 1998 shall be calculated and 62 10 reported pursuant to section 437A.6, subsection 2, as if such 62 11 subsection had been in effect for 1998. 62 12 4. The entity's total pole miles of electric transmission 62 13 lines owned or leased on December 31, 1998, by line voltage, 62 14 which would have been subject to taxation under section 437A.7 62 15 for the 1998 assessment year had such taxation been in effect 62 16 for assessment year 1998. Pole miles of electric transmission 62 17 lines which were jointly owned or leased in assessment year 62 18 1998 shall be calculated and reported pursuant to section 62 19 437A.7, subsection 3, as if such subsection had been in effect 62 20 for assessment year 1998. 62 21 5. The entity's total kilowatt-hours of electricity 62 22 delivered to consumers which would have been subject to 62 23 taxation under section 437A.4 for the assessment years 1994 62 24 through 1998 had such taxation been in effect for such 62 25 assessment years. 62 26 6. The entity's total therms of natural gas delivered to 62 27 consumers which would have been subject to taxation under 62 28 section 437A.5 for the assessment years 1994 through 1998 had 62 29 such taxation been in effect for such assessment years. 62 30 7. For each generation and transmission electric 62 31 cooperative, the excess property tax liability assignable to 62 32 each electric competitive service area principally served by 62 33 its distribution electric cooperative and municipal electric 62 34 cooperative association members pursuant to section 437A.4, 62 35 subsection 3, paragraph "c", subparagraph (4). 63 1 8. For each municipal electric cooperative association, 63 2 the excess property tax liability assignable to each electric 63 3 competitive service area principally served by its municipal 63 4 utility members on January 1, 1999. 63 5 If information necessary to compute the delivery tax rate 63 6 for any electric or natural gas competitive service area is 63 7 not timely reported, the director shall estimate a delivery 63 8 tax rate for such electric or natural gas competitive service 63 9 area which shall not be lower than the highest electric or 63 10 natural gas delivery tax rate computed for other electric or 63 11 natural gas competitive service areas. However, if such 63 12 information is provided within thirty days after the director 63 13 has published in the Iowa administrative bulletin the delivery 63 14 tax rates computed pursuant to section 437A.4, subsection 3, 63 15 paragraph "d", and section 437A.5, subsection 3, paragraph 63 16 "c", the director shall recalculate the electric or natural 63 17 gas delivery tax rate for such electric or natural gas 63 18 competitive service area and notify the taxpayers of the new 63 19 electric or natural gas delivery tax rate by publication in 63 20 the Iowa administrative bulletin on or before January 31, 63 21 2000. 63 22 Sec. 39. Sections 428.37 and 437.14, Code 1997, are 63 23 repealed. 63 24 Sec. 40. EFFECTIVE AND APPLICABILITY DATES – DIRECTIONS 63 25 TO CODE EDITOR. 63 26 1. Except as provided in subsection 2, this Act takes 63 27 effect January 1, 1999, and is applicable to property tax 63 28 assessment years beginning on or after January 1, 1999, and to 63 29 replacement tax years beginning on or after January 1, 1999. 63 30 2. Notwithstanding subsection 1, section 437A.15, 63 31 subsection 7, as enacted in this Act and which provides for 63 32 the establishment of a task force to study the effects of the 63 33 replacement tax, takes effect upon enactment. 63 34 63 35 64 1 64 2 MARY E. KRAMER 64 3 President of the Senate 64 4 64 5 64 6 64 7 RON J. CORBETT 64 8 Speaker of the House 64 9 64 10 I hereby certify that this bill originated in the Senate and 64 11 is known as Senate File 2416, Seventy-seventh General Assembly. 64 12 64 13 64 14 64 15 MARY PAT GUNDERSON 64 16 Secretary of the Senate 64 17 Approved , 1998 64 18 64 19 64 20 64 21 TERRY E. BRANSTAD 64 22 Governor
Text: SF02415 Text: SF02417 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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