House Study Bill 215 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act relating to the assessment and taxation of qualifying 1 local exchange carrier property. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2041YC (4) 84 rn/sc

H.F. _____ Section 1. Section 433.4, Code 2011, is amended to read as 1 follows: 2 433.4 Assessment. 3 The Except as otherwise provided in section 433.16, the 4 director of revenue shall on or before October 31 each year, 5 proceed to find the actual value of the property of these 6 companies in this state, taking into consideration the 7 information obtained from the statements required, and any 8 further information the director can obtain, using the same as 9 a means for determining the actual cash value of the property 10 of these companies within this state. The director shall 11 also take into consideration the valuation of all property 12 of these companies, including franchises and the use of the 13 property in connection with lines outside the state, and 14 making these deductions as may be necessary on account of 15 extra value of property outside the state as compared with 16 the value of property in the state, in order that the actual 17 cash value of the property of the company within this state 18 may be ascertained. The assessment shall include all property 19 of every kind and character whatsoever, real, personal, or 20 mixed, used by the companies in the transaction of telegraph 21 and telephone business; and the property so included in the 22 assessment shall not be taxed in any other manner than as 23 provided in this chapter . 24 Sec. 2. NEW SECTION . 433.16 Qualifying local exchange 25 carriers —— assessment and taxation —— exception. 26 1. For assessment years beginning on or after January 27 1, 2012, the property of qualifying local exchange carriers 28 shall be assessed for taxation according to subsections 2 and 29 3, exclusive of any other provision of this chapter. For 30 purposes of this section, “qualifying local exchange carriers” 31 means telecommunications companies that provide local exchange 32 service and have less than fifty thousand customer access lines 33 located in this state. 34 2. For valuations established on or after January 1, 2012, 35 -1- LSB 2041YC (4) 84 rn/sc 1/ 3

H.F. _____ the director shall determine the value of the land, buildings, 1 structures, and improvements of qualifying local exchange 2 carriers in the same manner as all other property assessed as 3 commercial property by the local assessor pursuant to chapters 4 427, 427A, 427B, 428, and 441. All reporting, protest, and 5 appeal procedures for qualifying local exchange carriers shall 6 be determined according to those provisions. 7 3. Notwithstanding any other provision of this section 8 or chapter 427, 427A, 427B, 428, or 441 to the contrary, 9 telephone wires, fiber optic cables, electronics, and similar 10 items used by qualifying local exchange carriers to transmit 11 sounds or data shall not be included when determining the value 12 of a qualifying local exchange carrier’s land, buildings, 13 structures, and improvements for purposes of this section. 14 EXPLANATION 15 This bill provides that property of certain local exchange 16 carriers shall be assessed for taxation by the department of 17 revenue in the same manner as commercial property is assessed 18 by the local assessor. The bill defines “qualifying local 19 exchange carriers” as telecommunications companies that provide 20 local exchange service and have less than 50,000 customer 21 access lines in Iowa. 22 The assessment provisions of Code section 433.4 23 currently provide that in ascertaining the actual value of 24 telecommunications company property, including local exchange 25 carrier property, the director of revenue shall include 26 all property of every kind and character whatsoever, real, 27 personal, or mixed, used by the company in the transaction of 28 telegraph and telephone business. 29 The bill provides that for assessments issued on and 30 after January 1, 2012, the land, buildings, structures, and 31 improvements of qualifying local exchange carriers shall be 32 assessed by the department of revenue for taxation in the same 33 manner as all other commercial property is assessed pursuant 34 to Code chapters 427, 427A, 427B, 428, and 441 by the local 35 -2- LSB 2041YC (4) 84 rn/sc 2/ 3

H.F. _____ assessor. The bill provides that all reporting and appeal 1 procedures for qualifying local exchange carriers shall be 2 determined pursuant to those Code chapters. 3 The bill provides that telephone wires, fiber optic 4 cables, electronics, and similar items used by qualifying 5 local exchange carriers to transmit sounds or data shall 6 not be included when determining the value of a qualifying 7 local exchange carrier’s land, buildings, structures, and 8 improvements. 9 -3- LSB 2041YC (4) 84 rn/sc 3/ 3