House File 673 H-1661 Amend House File 673 as follows: 1 1. By striking everything after the enacting clause 2 and inserting: 3 < Section 1. Section 427A.1, subsection 1, paragraph 4 h, Code 2011, is amended by striking the paragraph and 5 inserting in lieu thereof the following: 6 h. Property assessed by the department of revenue 7 pursuant to any of the following: 8 (1) Sections 428.24 to 428.29. 9 (2) Chapter 433 if such property is owned by a 10 qualifying local exchange carrier, as defined in 11 section 433.16. 12 (3) Chapter 433 if such property is not owned by 13 a qualifying local exchange carrier, as defined in 14 section 433.16, and was first assessed for taxation in 15 this state before January 1, 1996. 16 (4) Chapter 434. 17 (5) Chapter 437. 18 (6) Chapter 437A. 19 (7) Chapter 438. 20 Sec. 2. Section 433.4, Code 2011, is amended to 21 read as follows: 22 433.4 Assessment. 23 1. The Except as otherwise provided in section 24 433.16, the director of revenue shall on or before 25 October 31 each year, proceed to find the actual value 26 of the property of these companies in this state that 27 are not qualifying local exchange carriers as defined 28 in section 433.16 , taking into consideration the 29 information obtained from the statements required, and 30 any further information the director can obtain , using 31 the same as a means for determining the actual cash 32 value of the property of these companies within this 33 state . 34 2. The For company property that was first assessed 35 for taxation in this state before January 1, 1996, 36 the director shall also take into consideration 37 the information described in subsection 1 and 38 the valuation of all property of these companies, 39 including franchises and the use of the property in 40 connection with lines outside the state, and making 41 these deductions as may be necessary on account of 42 extra value of property outside the state as compared 43 with the value of property in the state, in order 44 that the actual cash value of the property of the 45 company within this state may be ascertained. The 46 assessment shall include all property of every kind and 47 character whatsoever, real, personal, or mixed, used 48 by the companies in the transaction of telegraph and 49 telephone business; and the property so included in the 50 -1- HF673.2650 (6) 84 md/sc/mb 1/ 4 #1.

assessment shall not be taxed in any other manner than 1 as provided in this chapter . 2 3. For company property that was first assessed for 3 taxation in this state on or after January 1, 1996, and 4 not otherwise assessed under section 476.1D, subsection 5 10, the director shall determine the value of such 6 property within this state as follows: 7 a. For the assessment years beginning on or after 8 January 1, 2012, but before January 1, 2018, the value 9 of such property for each company shall equal the sum 10 of the value of the property assessed in the manner 11 as all other property assessed as commercial property 12 pursuant to chapters 427, 427A, 427B, 428, and 441, 13 and the telecommunications company adjustment for the 14 applicable assessment year. 15 b. Each company’s base value shall be the total 16 assessed value of such company property assessed 17 pursuant to section 433.4, Code 2011, for the 18 assessment year beginning January 1, 2011. However, 19 if the company adds or disposes of an amount of 20 such property exceeding ten percent of the company’s 21 assessed value of such property for the assessment year 22 beginning January 1, 2011, or ten percent of the base 23 value most recently adjusted under this paragraph, the 24 company’s base value shall be adjusted to reflect those 25 additions or dispositions. 26 c. The telecommunications company adjustment shall 27 be determined as follows: 28 (1) For the assessment year beginning January 1, 29 2012, the telecommunications company adjustment shall 30 equal eighty-five percent of the difference between 31 the company’s base value and the assessed value of 32 such company property when assessed in the same manner 33 as all other property assessed as commercial property 34 under chapters 427, 427A, 427B, 428, and 441. 35 (2) For the assessment year beginning January 1, 36 2013, the telecommunications company adjustment shall 37 equal seventy percent of the difference between the 38 company’s base value and the assessed value of such 39 company property when assessed in the same manner as 40 all other property assessed as commercial property 41 under chapters 427, 427A, 427B, 428, and 441. 42 (3) For the assessment year beginning January 1, 43 2014, the telecommunications company adjustment shall 44 equal fifty-five percent of the difference between the 45 company’s base value and the assessed value of such 46 company property when assessed in the same manner as 47 all other property assessed as commercial property 48 under chapters 427, 427A, 427B, 428, and 441. 49 (4) For the assessment year beginning January 1, 50 -2- HF673.2650 (6) 84 md/sc/mb 2/ 4

2015, the telecommunications company adjustment shall 1 equal forty percent of the difference between the 2 company’s base value and the assessed value of such 3 company property when assessed in the same manner as 4 all other property assessed as commercial property 5 under chapters 427, 427A, 427B, 428, and 441. 6 (5) For the assessment year beginning January 1, 7 2016, the telecommunications company adjustment shall 8 equal twenty-five percent of the difference between 9 the company’s base value and the assessed value of 10 such company property when assessed in the same manner 11 as all other property assessed as commercial property 12 under chapters 427, 427A, 427B, 428, and 441. 13 (6) For the assessment year beginning January 14 1, 2017, the telecommunications company adjustment 15 shall equal ten percent of the difference between the 16 company’s base value and the assessed value of such 17 company property when assessed in the same manner as 18 all other property assessed as commercial property 19 under chapters 427, 427A, 427B, 428, and 441. 20 d. For the assessment year beginning January 21 1, 2018, and each assessment year thereafter, such 22 property shall be assessed by the director of revenue 23 in the same manner as all other property assessed 24 as commercial property by the local assessor under 25 chapters 427, 427A, 427B, 428, and 441. 26 Sec. 3. NEW SECTION . 433.16 Qualifying local 27 exchange carriers —— assessment. 28 For assessment years beginning on or after January 29 1, 2012, the property of qualifying local exchange 30 carriers shall be assessed for taxation by the director 31 of revenue under the provisions of section 433.4, Code 32 2011. For purposes of this section, “qualifying local 33 exchange carrier” means a telecommunications company 34 that provides local exchange service and has less than 35 fifty thousand customer access lines located in this 36 state. 37 Sec. 4. Section 476.1D, subsection 10, unnumbered 38 paragraph 2, Code 2011, is amended by striking the 39 unnumbered paragraph. 40 Sec. 5. EFFECTIVE DATE. 41 1. Except as provided in subsection 2, this Act 42 takes effect July, 1, 2011. 43 2. The section of this Act amending section 476.1D 44 takes effect July 1, 2017. 45 Sec. 6. APPLICABILITY. 46 1. Except as provided in subsection 2, this Act 47 applies to assessment years beginning on or after 48 January 1, 2012. 49 2. The section of this Act amending section 476.1D 50 -3- HF673.2650 (6) 84 md/sc/mb 3/ 4

applies to assessment years beginning on or after 1 January 1, 2018. > 2 2. Title page, by striking lines 1 through 3 3 and inserting < An Act relating to the assessment of 4 telecommunications company property for purposes of 5 property taxation, and including effective date and 6 applicability provisions. > 7 ______________________________ SANDS of Louisa -4- HF673.2650 (6) 84 md/sc/mb 4/ 4 #2.