SF 2386 (LSB 6277SV (2) 83)

SENATE FILE 2386

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SSB 3254)

A BILL FOR

An Act relating to assessment of telecommunications company property for purposes of property taxation, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 427A.1, subsection 1, paragraph h, Code 2009, is amended to read as follows:
   h.  Property assessed by the department of revenue pursuant to sections 428.24 to 428.29, or chapters 433, chapter 433 if such property was first assessed for taxation in this state before January 1, 1996, or chapters 434, 437, 437A, and 438.
    Sec. 2.  Section 433.4, Code Supplement 2009, is amended to read as follows:
   433.4  Assessment.
   1.  The director of revenue shall on or before October 31 each year, proceed to find the actual value of the property of these companies in this state, taking into consideration the information obtained from the statements required, and any further information the director can obtain, using the same as a means for determining the actual cash value of the property of these companies within this state.
   2.  The For property of a company that was first assessed for taxation in this state before January 1, 1996, the director shall also take into consideration the information described in subsection 1 and the valuation of all property of these companies, including franchises and the use of the property in connection with lines outside the state, and making these deductions as may be necessary on account of extra value of property outside the state as compared with the value of property in the state, in order that the actual cash value of the property of the company within this state may be ascertained. The assessment shall include all property of every kind and character whatsoever, real, personal, or mixed, used by the companies in the transaction of telegraph and telephone business; and the property so included in the assessment shall not be taxed in any other manner than as provided in this chapter.
   3.  For property of a company that was first assessed for taxation in this state on or after January 1, 1996, the director shall determine the value of the property of these companies within this state as follows:
   a.  For the assessment year beginning January 1, 2013, the value of such property shall equal the sum of the following:
   (1)  Eighty percent of the property’s value as determined in the manner provided under subsection 2.
   (2)  Twenty percent of the property’s value as determined in the manner provided under paragraph “e”.
   b.  For the assessment year beginning January 1, 2014, the value of such property shall equal the sum of the following:
   (1)  Sixty percent of the property’s value as determined in the manner provided under subsection 2.
   (2)  Forty percent of the property’s value as determined in the manner provided under paragraph “e”.
   c.  For the assessment year beginning January 1, 2015, the value of such property shall equal the sum of the following:
   (1)  Forty percent of the property’s value as determined in the manner provided under subsection 2.
   (2)  Sixty percent of the property’s value as determined in the manner provided under paragraph “e”.
   d.  For the assessment year beginning January 1, 2016, the value of such property shall equal the sum of the following:
   (1)  Twenty percent of the property’s value as determined in the manner provided under subsection 2.
   (2)  Eighty percent of the property’s value as determined in the manner provided under paragraph “e”.
   e.  For the assessment year beginning January 1, 2017, and each assessment year thereafter, such property shall be assessed in the same manner as all other property assessed as commercial property by the local assessor under chapters 427, 427A, 427B, 428, and 441; provided that such property that is not exempt under subsection 4 or other provision of law shall be valued at an amount no greater than the cost of such property, reduced by accounting depreciation and by any appropriate adjustments for functional and economic obsolescence, and in determining said values the director shall not use any minimum amount or percentage of original cost as the base or minimum value for any item or class of property, regardless of whether the property is still in service.
   4.  Property of a company that was first assessed for taxation in this state on or after January 1, 1996, shall not be assessed and taxed as real property to the extent it consists of cable, wire, conduit, vaults, switches, or other equipment or fixtures used primarily to provide or facilitate the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signal to a point, or between or among points, regardless of the content or technology utilized and regardless of whether the property would otherwise be considered attached to the real property.
    Sec. 3.  Section 476.1D, subsection 10, unnumbered paragraph 2, Code 2009, is amended by striking the unnumbered paragraph.
    Sec. 4.  EFFECTIVE UPON ENACTMENT AND APPLICABILITY.
   1.  Except as provided in subsection 2, this Act takes effect July 1, 2012, and applies to assessment years beginning on or after January 1, 2013.
   2.  The section of this Act amending section 476.1D takes effect July 1, 2016, and applies to assessment years beginning on or after January 1, 2017.
EXPLANATION
   This bill relates to the manner in which telecommunications company property is taxed.
   The assessment provisions of Code section 433.4 currently provide that in ascertaining the actual value of telecommunications company property the director of revenue shall include all property of every kind and character whatsoever, real, personal, or mixed, used by the company in the transaction of telegraph and telephone business.
   Under the bill, property of a telecommunications company that was first assessed for taxation before January 1, 1996, continues to be assessed in the manner provided under current Code section 433.4. However, the bill modifies the Code section to provide that the value of a company’s property that was first assessed for taxation on or after January 1, 1996, shall, subject to specific restrictions and provisions in the bill, be determined in the same manner as all other property assessed as commercial property by the local assessor.
   For the assessment year beginning January 1, 2013, and for each assessment year through the assessment year beginning January 1, 2016, the bill provides for the transition from the current assessment methodology in Code section 433.4 to the new assessment methodology created in the bill for telecommunications company property that was first assessed for taxation on or after January 1, 1996. The bill then provides that for the assessment year beginning January 1, 2017, and for each assessment year thereafter, all of the telecommunication company’s property that was first assessed for taxation on or after January 1, 1996, is assessed using the new assessment methodology created in the bill.
   Except for the section of the bill amending Code section 476.1D, the bill takes effect July 1, 2012, and applies to assessment years beginning on or after January 1, 2013. The section of the bill amending Code section 476.1D takes effect July 1, 2016, and applies to assessment years beginning on or after January 1, 2017.