Senate Study Bill 3036

                                       SENATE FILE       
                                       BY  (PROPOSED COMMITTEE ON
                                            COMMERCE BILL BY
                                            CHAIRPERSON BEHN)


    Passed Senate,  Date              Passed House, Date              
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to municipal utilities that provide local
  2    exchange services, including nonsubscriber costs, the
  3    confidentiality and audits of certain accounting records, and
  4    exemption from sales and use taxes.
  5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  6 TLSB 5761SC 80
  7 kk/gg/14

PAG LIN

  1  1    Section 1.  Section 388.10, subsection 1, paragraph a, Code
  1  2 2003, is amended by adding the following new subparagraph:
  1  3    NEW SUBPARAGRAPH.  (5)  Require nonsubscribers of the local
  1  4 exchange services to pay any costs directly associated with
  1  5 providing local exchange services.
  1  6    Sec. 2.  Section 388.10, subsection 2, paragraph a, Code
  1  7 2003, is amended to read as follows:
  1  8    a.  Prepare and maintain records which record the full cost
  1  9 accounting of providing local exchange service.  The records
  1 10 shall show the amount and source of capital for initial
  1 11 construction or acquisition of the local exchange system or
  1 12 facilities.  Notwithstanding section 388.9, these records
  1 13 shall be public records for purposes of chapter 22.  This
  1 14 section shall not prohibit a municipal utility from utilizing
  1 15 capital from any lawful source, provided that the reasonable
  1 16 cost of such capital is accounted for as a cost of providing
  1 17 the service.
  1 18    Sec. 3.  Section 388.10, subsection 2, Code 2003, is
  1 19 amended by adding the following new paragraph:
  1 20    NEW PARAGRAPH.  d.  Conduct an annual audit certifying
  1 21 compliance with this section.  The audit shall be performed by
  1 22 the auditor of state or by a certified public accountant
  1 23 certified in the state of Iowa.  The annual audit shall be a
  1 24 public record for purposes of chapter 22.
  1 25    Sec. 4.  Section 423.3, subsection 31, paragraph a, as
  1 26 enacted by 2003 Iowa Acts, First Extraordinary Session,
  1 27 chapter 2, section 96, is amended to read as follows:
  1 28    a.  The sales price of goods, wares, or merchandise sold
  1 29 to, or of services furnished, and used by or in connection
  1 30 with the operation of any municipally owned public utility
  1 31 engaged in selling gas, electricity, heat, or pay television
  1 32 service, or communication service to the general public.
  1 33                           EXPLANATION
  1 34    This bill relates to municipal utilities that provide local
  1 35 exchange or communication services.
  2  1    The bill prohibits municipal utilities from requiring
  2  2 nonsubscribers of the municipal utility's local exchange
  2  3 service to pay any direct costs of providing the local
  2  4 exchange services.  The bill makes certain accounting records
  2  5 maintained for the municipal utility providing local exchange
  2  6 service public records and requires an annual audit to be
  2  7 performed by the auditor of state or a certified public
  2  8 accountant.
  2  9    The bill provides that sales and services sold to or used
  2 10 by or in connection with the operation of municipally owned
  2 11 public utilities that are engaged in selling communication
  2 12 service to the public are not exempt from sales and use taxes.
  2 13 LSB 5761SC 80
  2 14 kk/gg/14