House File 703 



                                       HOUSE FILE       
                                       BY  QUIRK


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

                                      A BILL FOR

  1 An Act relating to assessment of telecommunications company
  2    property for purposes of property taxation, and providing
  3    effective and retroactive applicability dates.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 2161HH 82
  6 rn/je/5

PAG LIN



  1  1    Section 1.  Section 427A.1, Code 2007, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  6A.  Notwithstanding the other provisions
  1  4 of this section, property described in this section shall not
  1  5 be assessed and taxed as real property to the extent it
  1  6 consists of cable, wire, conduit, vaults, switches, or other
  1  7 equipment or fixtures used primarily to provide or facilitate
  1  8 the electronic transmission, conveyance, or routing of voice,
  1  9 data, audio, video, or any other information or signal to a
  1 10 point, or between or among points, regardless of the content
  1 11 or technology utilized and regardless of whether the property
  1 12 would otherwise be considered "attached" to the real property.
  1 13    Sec. 2.  Section 427B.17, subsection 5, unnumbered
  1 14 paragraph 1, Code 2007, is amended to read as follows:
  1 15    This section shall not apply to property assessed by the
  1 16 department of revenue pursuant to sections 428.24 to 428.29,
  1 17 or chapters 433, 434, 437, 437A, and 438, and such property
  1 18 shall not receive the benefits of this section.
  1 19    Sec. 3.  Section 433.4, Code 2007, is amended to read as
  1 20 follows:
  1 21    433.4  ASSESSMENT.
  1 22    The director of revenue shall on the second Monday in July
  1 23 of each year, proceed to find the actual value of the property
  1 24 of these companies in this state, taking into consideration
  1 25 the information obtained from the statements required, and any
  1 26 further information the director can obtain, using and shall
  1 27 determine the same as a means for determining the actual cash
  1 28 value of the property of these companies within this state in
  1 29 the same manner as all other property assessed as commercial
  1 30 property by the local assessor under chapters 427, 427A, 427B,
  1 31 428, and 441; provided that such property that is not
  1 32 otherwise exempt shall be valued at an amount no greater than
  1 33 the cost of such property, reduced by accounting depreciation
  1 34 and by any appropriate adjustments for functional and economic
  1 35 obsolescence, and in determining said values the director
  2  1 shall not use any minimum amount or percentage of original
  2  2 cost as the base or minimum value for any item or class of
  2  3 property, regardless of whether the property is still in
  2  4 service.  The director shall also take into consideration the
  2  5 valuation of all property of these companies, including
  2  6 franchises and the use of the property in connection with
  2  7 lines outside the state, and making these deductions as may be
  2  8 necessary on account of extra value of property outside the
  2  9 state as compared with the value of property in the state, in
  2 10 order that the actual cash value of the property of the
  2 11 company within this state may be ascertained.  The assessment
  2 12 shall include all property of every kind and character
  2 13 whatsoever, real, personal, or mixed, used by the companies in
  2 14 the transaction of telegraph and telephone business; and the
  2 15 property so included in the assessment shall not be taxed in
  2 16 any other manner than as provided in this chapter.
  2 17    Sec. 4.  Section 476.1D, subsection 10, unnumbered
  2 18 paragraph 2, Code 2007, is amended by striking the unnumbered
  2 19 paragraph.
  2 20    Sec. 5.  EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
  2 21 This Act, being deemed of immediate importance, takes effect
  2 22 upon enactment and applies retroactively to assessment years
  2 23 beginning on or after January 1, 2007.
  2 24                           EXPLANATION
  2 25    This bill relates to the manner in which telecommunications
  2 26 company property is taxed.
  2 27    The assessment provisions of Code section 433.4 currently
  2 28 provide that in ascertaining the actual value of
  2 29 telecommunications company property the director of revenue
  2 30 shall include all property of every kind and character
  2 31 whatsoever, real, personal, or mixed, used by the company in
  2 32 the transaction of telegraph and telephone business.  The bill
  2 33 modifies the Code section to provide that the value shall be
  2 34 determined in the same manner as all other property assessed
  2 35 as commercial property by the local assessor.  The bill
  3  1 provides, however, that telecommunications company property
  3  2 that is not otherwise exempt shall be valued at an amount no
  3  3 greater than the cost of the property reduced by accounting
  3  4 depreciation with appropriate adjustments for functional and
  3  5 economic obsolescence, and that in determining the value the
  3  6 director shall not use any minimum amount or percentage of
  3  7 original cost as the base or minimum value for any item or
  3  8 class of property, regardless of whether the property is still
  3  9 in service.
  3 10    The bill also provides that telecommunications company
  3 11 property shall not be taxed as real property to the extent it
  3 12 consists of cable, wire, conduit, vaults, switches, or other
  3 13 equipment or fixtures used primarily to provide or facilitate
  3 14 the electronic transmission, conveyance, or routing of voice,
  3 15 data, audio, video, or any other information or signal to a
  3 16 point, or between or among points, regardless of the content
  3 17 or technology utilized and regardless of whether the property
  3 18 would otherwise be considered "attached" to the real property.
  3 19    The bill additionally provides that telecommunications
  3 20 company property classified as machinery used in
  3 21 manufacturing, and computers and related equipment, currently
  3 22 not subject to special valuation provisions conferring
  3 23 property tax exempt status, shall be made subject to those
  3 24 provisions and considered either exempt from property taxation
  3 25 or valued at 0 percent of their net acquisition cost.
  3 26    The bill makes conforming changes to additional Code
  3 27 sections consistent with the bill's provisions.
  3 28    The bill takes effect upon enactment and applies
  3 29 retroactively to assessment years beginning on or after
  3 30 January 1, 2007.
  3 31 LSB 2161HH 82
  3 32 rn:sc/je/5