HSB 223 (LSB 2472YC (2) 85)

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 telecommunications company property and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 433.4, Code 2013, 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
 
real 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
 
real 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.  For assessment years beginning on or after January 1, 2014, except as specifically provided in this chapter, a company’s real property 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.
    Sec. 2.  Section 441.21, subsection 5, Code 2013, is amended to read as follows:
   5.  For valuations established as of January 1, 1979, commercial property and industrial property, excluding properties referred to in section 427A.1, subsection 8, shall be assessed as a percentage of the actual value of each class of property. The percentage shall be determined for each class of property by the director of revenue for the state in accordance with the provisions of this section. For valuations established as of January 1, 1979, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend for each class of property shall be the total actual valuation for each class of property established for 1978, plus six percent of the amount so determined. The divisor for each class of property shall be the valuation for each class of property established for 1978, as reported by the assessors on the abstracts of assessment for 1978, plus the amount of value added to the total actual value by the revaluation of existing properties in 1979 as equalized by the director of revenue pursuant to section 441.49. For valuations established as of January 1, 1979, property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be considered as one class of property and shall be assessed as a percentage of its actual value. The percentage shall be determined by the director of revenue in accordance with the provisions of this section. For valuations established as of January 1, 1979, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend shall be the total actual valuation established for 1978 by the department of revenue, plus ten percent of the amount so determined. The divisor for property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be the valuation established for 1978, plus the amount of value added to the total actual value by the revaluation of the property by the department of revenue as of January 1, 1979. For valuations established as of January 1, 1980, commercial property and industrial property, excluding properties referred to in section 427A.1, subsection 8, shall be assessed at a percentage of the actual value of each class of property. The percentage shall be determined for each class of property by the director of revenue for the state in accordance with the provisions of this section. For valuations established as of January 1, 1980, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend for each class of property shall be the dividend as determined for each class of property for valuations established as of January 1, 1979, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1979, plus four percent of the amount so determined. The divisor for each class of property shall be the total actual value of all such property in 1979, as equalized by the director of revenue pursuant to section 441.49, plus the amount of value added to the total actual value by the revaluation of existing properties in 1980. The director shall utilize information reported on the abstracts of assessment submitted pursuant to section 441.45 in determining such percentage. For valuations established as of January 1, 1980, property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be assessed at a percentage of its actual value. The percentage shall be determined by the director of revenue in accordance with the provisions of this section. For valuations established as of January 1, 1980, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend shall be the total actual valuation established for 1979 by the department of revenue, plus eight percent of the amount so determined. The divisor for property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be the valuation established for 1979, plus the amount of value added to the total actual value by the revaluation of the property by the department of revenue as of January 1, 1980. For valuations established as of January 1, 1981, and each year thereafter, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which commercial property and industrial property, excluding properties referred to in section 427A.1, subsection 8, shall be assessed shall be calculated in accordance with the methods provided herein, except that any references to six percent in this subsection shall be four percent. For valuations established as of January 1, 1981, and each year thereafter, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be assessed shall be calculated in accordance with the methods provided herein, except that any references to ten percent in this subsection shall be eight percent.

For valuations established on or after January 1, 2014, property valued by the department of revenue pursuant to chapter 433 shall be assessed at a percentage of its actual value. For valuations established for the assessment year beginning January 1, 2014, the percentage of actual value at which property valued by the department of revenue pursuant to chapter 433 shall be assessed shall be eighty percent. For valuations established for the assessment year beginning January 1, 2015, and each year thereafter, the percentage of actual value at which property valued by the department of revenue pursuant to chapter 433 shall be assessed shall be sixty percent. Beginning with valuations established as of January 1, 1979, and each year thereafter, property valued by the department of revenue pursuant to chapter 434 shall also be assessed at a percentage of its actual value which percentage shall be equal to the percentage determined by the director of revenue for commercial property, industrial property, or property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438, whichever is lowest.
    Sec. 3.  Section 441.21, subsections 9 and 10, Code 2013, are amended to read as follows:
   9.  Not later than November 1, 1979, and November 1 of each subsequent year, the director shall certify to the county auditor of each county the percentages of actual value at which residential property, agricultural property, commercial property, industrial property,
 
property valued by the department of revenue under chapter 433, and property valued by the department of revenue pursuant to chapters 428, 433, 434, 437, and 438 in each assessing jurisdiction in the county shall be assessed for taxation. The county auditor shall proceed to determine the assessed values of agricultural property, residential property, commercial property, industrial property,
 
property valued by the department of revenue under chapter 433, and property valued by the department of revenue pursuant to chapters 428, 433, 434, 437, and 438 by applying such percentages to the current actual value of such property, as reported to the county auditor by the assessor, and the assessed values so determined shall be the taxable values of such properties upon which the levy shall be made.
   10.  The percentage of actual value computed by the director for agricultural property, residential property, commercial property, industrial property, property valued by the department of revenue under chapter 433, and property valued by the department of revenue pursuant to chapters 428, 433, 434, 437, and 438 and used to determine assessed values of those classes of property does not constitute a rule as defined in section 17A.2, subsection 11.
    Sec. 4.  Section 476.1D, subsection 10, Code 2013, is amended by striking the subsection.
    Sec. 5.  APPLICABILITY.  This Act applies to assessment years beginning on or after January 1, 2014.
EXPLANATION
   This bill relates to the manner in which the property of telecommunications companies is assessed and taxed.
   Current Code section 433.4 requires the director of revenue to value for property tax purposes all property of the telephone and telegraph companies used in the transaction of telegraph and telephone business in this state, including real, personal, or mixed property. The bill provides that for assessment years beginning on or after January 1, 2014, only the real property of telegraph and telephone companies is subject to valuation and taxation and that such property 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 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.
   The bill also provides that for valuations established on or after January 1, 2014, property valued by the department of revenue pursuant to Code chapter 433 shall be assessed at a percentage of its actual value. For valuations established for the assessment year beginning January 1, 2014, the percentage of actual value at which property valued by the department of revenue pursuant to Code chapter 433 shall be assessed shall be 80 percent. For valuations established for the assessment year beginning January 1, 2015, and subsequent assessment years, the percentage of actual value at which property valued by the department of revenue pursuant to Code chapter 433 shall be assessed shall be 60 percent.
   The bill applies to assessment years beginning on or after January 1, 2014.