House File 2448
HOUSE FILE
BY COMMITTEE ON COMMERCE,
REGULATION AND LABOR
(SUCCESSOR TO HSB 583)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to municipal utilities that provide local
2 exchange services the confidentiality and audits of certain
3 accounting records, and exemption from sales and use taxes.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 5761HV 80
6 kk/gg/14
PAG LIN
1 1 Section 1. Section 11.6, subsection 1, paragraph a,
1 2 unnumbered paragraph 1, Code 2003, is amended to read as
1 3 follows:
1 4 The financial condition and transactions of all cities and
1 5 city offices, counties, county hospitals organized under
1 6 chapters 347 and 347A, memorial hospitals organized under
1 7 chapter 37, entities organized under chapter 28E having gross
1 8 receipts in excess of one hundred thousand dollars in a fiscal
1 9 year, merged areas, area education agencies, and all school
1 10 offices in school districts, shall be examined at least once
1 11 each year, except that cities having a population of seven
1 12 hundred or more but less than two thousand shall be examined
1 13 at least once every four years, and cities having a population
1 14 of less than seven hundred may be examined as otherwise
1 15 provided in this section. The examination shall cover the
1 16 fiscal year next preceding the year in which the audit is
1 17 conducted. The examination of school offices shall include an
1 18 audit of all school funds, the certified annual financial
1 19 report, and the certified enrollment as provided in section
1 20 257.6. Differences in certified enrollment shall be reported
1 21 to the department of management. The examination of a city
1 22 that owns or operates a municipal utility providing local
1 23 exchange services pursuant to chapter 476 shall include an
1 24 audit of the city's compliance with section 388.10.
1 25 Sec. 2. Section 388.10, subsection 2, paragraph a, Code
1 26 2003, is amended to read as follows:
1 27 a. Prepare and maintain records which record the full cost
1 28 accounting of providing local exchange service. The records
1 29 shall show the amount and source of capital for initial
1 30 construction or acquisition of the local exchange system or
1 31 facilities. These records shall be public records subject to
1 32 the requirements of chapter 22. Information in the records
1 33 that is not subject to examination or copying as provided in
1 34 section 388.9, subsection 2, may be expunged from the records
1 35 prior to public disclosure. This section shall not prohibit a
2 1 municipal utility from utilizing capital from any lawful
2 2 source, provided that the reasonable cost of such capital is
2 3 accounted for as a cost of providing the service. In
2 4 accounting for the cost of use of any city employees,
2 5 facilities, equipment, or services, a city or municipal
2 6 utility may make a reasonable allocation of the cost of use of
2 7 any city employees, facilities, equipment, or services used by
2 8 a municipal utility providing telecommunications service based
2 9 upon reasonable criteria for the distribution of the cost of
2 10 use in any manner which is not inconsistent with generally
2 11 accepted accounting principles.
2 12 Sec. 3. Section 388.10, subsection 2, Code 2003, is
2 13 amended by adding the following new paragraph:
2 14 NEW PARAGRAPH. d. Make an annual certification of
2 15 compliance with this section. For any year for which the city
2 16 or municipal utility is not audited in accordance with section
2 17 11.6, the city or municipal utility shall contract with or
2 18 employ the auditor of state or a certified public accountant
2 19 certified in the state of Iowa to attest to the certification.
2 20 The attestation report shall be a public record for purposes
2 21 of chapter 22.
2 22 Sec. 4. Section 423.3, subsection 31, paragraph a, as
2 23 enacted by 2003 Iowa Acts, First Extraordinary Session,
2 24 chapter 2, section 96, is amended to read as follows:
2 25 a. The sales price of goods, wares, or merchandise sold
2 26 to, or of services furnished, and used by or in connection
2 27 with the operation of any municipally owned public utility
2 28 engaged in selling gas, electricity, heat, or pay television
2 29 service, or communication service to the general public.
2 30 EXPLANATION
2 31 This bill relates to municipal utilities that provide local
2 32 exchange or communication services.
2 33 Under the bill, a city that owns or operates a municipal
2 34 utility that is audited pursuant to Code section 11.6 must
2 35 include an audit of compliance with the requirements of Code
3 1 section 388.10. The bill makes certain accounting records
3 2 maintained for the municipal utility providing local exchange
3 3 service public records and requires an annual audit to be
3 4 performed by the auditor of state or a certified public
3 5 accountant. The bill provides that a city or municipal
3 6 utility may allocate the cost of use of city resources by a
3 7 municipal utility providing telecommunications service
3 8 consistent with generally accepted accounting principles.
3 9 The bill provides that sales and services sold to or used
3 10 by or in connection with the operation of municipally owned
3 11 public utilities that are engaged in selling communication
3 12 service to the public are not exempt from sales and use taxes.
3 13 LSB 5761HV 80
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