HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS)

A BILL FOR

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

    Section 1.  Section 433.4, Code 2011, 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
 
used by the companies in the transaction of telegraph and telephone business, 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. The director shall also take into consideration 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
 
The property so included in the assessment shall not be taxed in any other manner than as provided in this chapter.
   2.
  a.  Except as provided in paragraph “c”, for assessment years beginning on or after January 1, 2013, a company’s property, excluding the property identified in paragraph “b” as exempt from taxation, shall be subject to assessment and taxation under this chapter by the director of revenue in the same manner as property assessed and taxed as commercial property under chapters 427, 427A, 427B, 428, and 441.
   b.  A company’s property that is any of the following is exempt from taxation and shall not be assessed for taxation:
   (1)  Central office equipment.
   (2)  Transmission equipment.

   (3)  Qualified telephone company property. However, qualified telephone company property shall be valued and included in the company’s assessment for the assessment years, and to the extent specified, in paragraph “c”.
   c.  For assessment years beginning on or after January 1, 2013, but before January 1, 2017, the director of revenue shall add to the actual value determined under paragraph “a” for the applicable assessment year, the following:
   (1)  For the assessment year beginning January 1, 2013, an amount equal to the actual value of the company’s qualified telephone company property that exceeds five million dollars.
   (2)  For the assessment year beginning January 1, 2014, an amount equal to the actual value of the company’s qualified telephone company property that exceeds fifty million dollars.
   (3)  For the assessment year beginning January 1, 2015, an amount equal to the actual value of the company’s qualified telephone company property that exceeds one hundred million dollars.
   (4)  For the assessment year beginning January 1, 2016, an amount equal to the actual value of the company’s qualified telephone company property that exceeds one hundred fifty million dollars.
    Sec. 2.  Section 433.12, Code 2011, is amended by adding the following new subsections:
   NEW SUBSECTION.  1A.  As used in this chapter, “central office equipment” means equipment owned or leased by a company and used in initiating, amplifying, switching, or monitoring telecommunications services, including such ancillary equipment necessary for the support, regulation, control, repair, or testing of such equipment.
   NEW SUBSECTION.  3.  As used in this chapter, “qualified telephone company property” means telephone wire, telephone cable, fiber optic cable, conduit systems, poles, or other equipment owned or leased by a company and used by the company to transmit sound or data.

   NEW SUBSECTION.  4.  As used in this chapter, “transmission equipment” means equipment owned or leased by a company and used in the process of sending information from one location to another location, including such ancillary equipment necessary for the support, regulation, control, repair, or testing of such equipment.
    Sec. 3.  Section 476.1D, subsection 10, Code Supplement 2011, is amended by striking the subsection.
    Sec. 4.  EFFECTIVE DATE.
   1.  Except as provided in subsection 2, this Act takes effect July 1, 2012.
   2.  The section of this Act amending section 476.1D takes effect July 1, 2016.
    Sec. 5.  APPLICABILITY.
   1.  Except as provided in subsection 2, this Act applies to assessment years beginning on or after January 1, 2013.
   2.  The section of this Act amending section 476.1D applies to assessment years beginning on or after January 1, 2017.
EXPLANATION
   This bill relates to the manner in which the property of telecommunications companies is assessed and taxed.
   The assessment provisions of current Code section 433.4 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.
   The bill strikes the provisions that included all kinds and character of property in the determination of actual value of a company’s property. Instead, the bill provides that for assessment years beginning on or after January 1, 2013, a company’s property, excluding central office equipment, transmission equipment, and qualified telephone company property, all as defined in the bill, shall be subject to assessment and taxation under Code chapter 433 by the director of revenue in the same manner as property assessed and taxed as commercial property. The bill provides, however, that for assessment years beginning on or after January 1, 2013, but before January 1, 2017, the director of revenue shall add to the actual value so determined for that assessment year a specified amount of actual value of the company’s qualified telephone company property. The bill defines “qualified telephone company property” as telephone wire, telephone cable, fiber optic cable, conduit systems, poles, or other equipment owned or leased by a company and used by the company to transmit sound or data.
   The bill strikes a provision in Code section 476.1D that allowed certain specified long-distance telephone company property to be assessed for taxation as commercial property by the local assessor. 
   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.