701—77.1 (428,433,437,438) Definition of terms.
	 77.1(1) The term “utility company” shall mean and include all persons engaged in the operating of gasworks, waterworks, telephones, including telecommunication companies and cities that own or operate a municipal utility providing local exchange services pursuant to Iowa Code chapter 476, pipelines, electric transmission lines, and electric light or power plants, as set forth in Iowa Code chapters 428, 433, 437, and 438. Any utility company subject to taxation under Iowa Code chapter 437A shall not be subject to valuation under this chapter.
	 77.1(2) The term “unit value” or “unit market value” shall mean the market value arrived at by using the appraisal method of valuing an entire operating property, considered as a whole and capable of performing the function for which it was created, such as (by way of illustration and not limitation) (1) generating, transmitting and distributing electricity; or (2) transporting or distributing natural gas.
	 77.1(3) The term “operating property” shall mean all property owned by or leased to a utility company, not otherwise taxed separately, made nontaxable by law, or property leased to companies valued and assessed pursuant to Iowa Code chapter 428, which is necessary to and without which the utility could not perform the activities for which the utility is formed, such as (by way of illustration and not limitation) (1) generating, transmitting and distributing electricity; or (2) transporting or distributing natural gas. With regard to property whose identity as “operating” or “nonoperating” property is not clearly ascertainable, the property shall be considered operating property if the utility could not reasonably be expected to perform the referenced activities in the absence of such property.
	 77.1(4) The term “nonoperating property” shall mean all property owned by a utility not defined by subrule 77.1(3) as “operating property.”
	 77.1(5) The term “comparable sales” shall mean actual sales transactions, between willing buyers and willing sellers, neither being under any compulsion to buy or sell, of property which is similar in purpose, function and design to the property to which the comparison is being made. Where the determination of value is being made, the sale of a portion of a unit which is nominally similar in purpose and function to the unit being valued shall not be considered a comparable sale, absent proof by evidence other than the terms of the sale itself, that the sales price was based on some unit of measurement which is common both to the property sold and the property being valued and which is not affected by the fact that less than the entire unit is being sold, such as (by way of illustration and not limitation) the price per square foot of the property.
	 77.1(6) The term “income approach to unit value” shall mean the estimate of unit market value obtained by dividing an appropriate income stream by an appropriate discount rate.
	 77.1(7) The term “stock and debt approach to unit value” shall mean the estimate of unit market value determined by combining the market value of the stock, debt, current liabilities, other liabilities, including leases, except those leases of companies valued and assessed pursuant to Iowa Code chapter 428, and deferred credits associated with the operating property of a utility company.
	 77.1(8) The term “cost approach to unit value” shall mean the estimate of value determined by combining the original cost less a depreciation allowance for the operating property of a utility company.
	 77.1(9) The term “respondent” shall include the utility company whose property is to be valued.
	 77.1(10) The term “leased assets” shall mean both operational and capital leases.
	 77.1(11) The term “original cost” shall mean the actual cost of the property to its present owner, not the first cost at the time it was originally constructed and placed in service.
	 77.1(12) “Long distance telephone company” means an entity that provides telephone service and facilities between local exchanges and has been classified as such by the utilities board of the department of commerce, but does not include a cellular service provider or a local exchange utility holding a certificate issued under Iowa Code section 476.29(12). The rules contained in 701—Chapter 71, rather than this chapter, apply to the assessment of long distance telephone company property first assessed for taxation on or after January 1, 1996.
	 77.1(13) The term “replacement cost new less depreciation” or “RCNLD” shall mean the cost to the present owner of acquiring or constructing at current prices a property that is the functional equivalent of an existing property less an allowance for depreciation.
This rule is intended to implement Iowa Code chapters 428, 437, and 438 and sections 433.12 and 476.1D(10).