S.F. 454 Section 1. Section 433.4, Code 2013, is amended to read as 1 follows: 2 433.4 Assessment. 3 1. The director of revenue shall on or before October 31 4 each year, proceed to find the actual value of the property of 5 these companies in this state that is used by the companies in 6 the transaction of telegraph and telephone business , taking 7 into consideration the information obtained from the statements 8 required, and any further information the director can obtain, 9 using the same as a means for determining the actual cash value 10 of the property of these companies within this state. The 11 director shall also take into consideration the valuation of 12 all property of these companies, including franchises and the 13 use of the property in connection with lines outside the state, 14 and 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 . The property so included in 22 the assessment shall not be taxed in any other manner than as 23 provided in this chapter . 24 2. For each assessment year beginning on or after January 25 1, 2014, each company assessed for taxation under this chapter 26 shall receive a partial exemption from taxation on the value 27 of the company’s property. The amount of the exemption for 28 each company shall be equal to the lesser of seventy-five 29 percent of the actual value of the property of such company 30 for that assessment year, as determined under subsection 1, or 31 twenty-five million two hundred fifty thousand dollars. 32 Sec. 2. Section 433.5, Code 2013, is amended to read as 33 follows: 34 433.5 Actual value per mile —— exemption value per mile . 35 -1- LSB 2535SV (1) 85 md/sc 1/ 7

S.F. 454 1. The director of revenue shall ascertain the actual value 1 per mile of the property of each of said companies company 2 within this state by dividing the total actual value, as above 3 ascertained under section 433.4, subsection 1 , by the number of 4 miles of line of such company within the state, and the result 5 shall be deemed and held to be the actual value per mile of line 6 of the property of such company within this state. 7 2. The director of revenue shall ascertain the exemption 8 value per mile of the property of each company within this 9 state by dividing the amount of the exemption for that company 10 determined under section 433.4, subsection 2, by the number of 11 miles of line of such company within the state, and the result 12 shall be deemed and held to be the exemption value per mile of 13 line for that company. 14 Sec. 3. Section 433.8, Code 2013, is amended to read as 15 follows: 16 433.8 Assessment in each county —— how certified. 17 The director of revenue shall, for the purpose of 18 determining what amount shall be assessed to any one of said 19 companies each company in each county of the state into which 20 the line of the said company extends, multiply the assessed 21 or taxable value per mile of line of said company, as above 22 ascertained, by the number of miles in each of said counties, 23 and the result thereof shall be by the director certified 24 certify to the several county auditors of the respective 25 counties into, over, or through which said line extends 26 the number of miles of line in the county for that company, 27 the actual value per mile of line for that company, and the 28 exemption value per mile of line for that company . 29 Sec. 4. Section 433.9, Code 2013, is amended to read as 30 follows: 31 433.9 Entry of certificate. 32 At the first meeting of the board of supervisors held after 33 such statement the certification made under section 433.8 is 34 received by the county auditor, it shall cause such statement 35 -2- LSB 2535SV (1) 85 md/sc 2/ 7

S.F. 454 certification to be entered in its minute book, and make and 1 enter therein an order stating the length of the lines and the 2 assessed actual value of the property of each of said companies 3 situated in each city, township, or lesser taxing district 4 in its county, as fixed by the director of revenue , which . 5 The value certified by the director of revenue, following 6 application of the percentage of actual value under section 7 441.21, and following the application of the exemption value 8 certified by the director of revenue, shall constitute the 9 taxable value of said property for taxing purposes, and the 10 taxes on said property when collected by the county treasurer 11 shall be disposed of as other taxes on real estate. The county 12 auditor shall transmit a copy of said order to the council or 13 trustees of each city or township in which the lines of said 14 company extend. 15 Sec. 5. REPEAL. Section 433.6, Code 2013, is repealed. 16 Sec. 6. PROPERTY TAXATION OF TELECOMMUNICATIONS COMPANIES 17 STUDY —— REPORT. 18 1. a. The department of revenue, in consultation with 19 the department of management, representatives of companies 20 providing telecommunications services in this state by 21 any means, including but not limited to mobile, wireless, 22 voice over internet protocol, and landline, and other 23 interested persons shall study the current system of assessing 24 telecommunications company property and levying property tax 25 against companies that provide telecommunications services in 26 this state and make recommendations for changes. 27 b. The department of revenue shall prepare and file a report 28 detailing recommendations for changes to the current system 29 of assessing telecommunications company property and levying 30 property tax against companies providing telecommunications 31 services in this state. The report shall also include 32 recommendations for establishing methods to provide 33 equivalent property tax treatment for all companies providing 34 telecommunications services in this state and recommendations 35 -3- LSB 2535SV (1) 85 md/sc 3/ 7

S.F. 454 for apportioning property tax revenues to the appropriate 1 local taxing authorities in the state. The report shall also 2 include proposed legislation to implement the recommendations 3 contained in the report. The report shall be filed by the 4 department of revenue with the chairpersons and ranking members 5 of the ways and means committees of the senate and the house 6 of representatives and with the legislative services agency by 7 August 1, 2015. 8 c. Upon receipt of the report by the chairpersons and 9 ranking members of the ways and means committees under 10 paragraph “b”, a legislative telecommunications company 11 property tax review committee consisting of six members of 12 the general assembly, two appointed by the majority leader 13 of the senate, one appointed by the minority leader of 14 the senate, two appointed by the speaker of the house of 15 representatives, and one appointed by the minority leader of 16 the house of representatives shall review the information and 17 recommendations contained in the report. The department of 18 revenue shall provide additional information and analysis to 19 the review committee or the general assembly upon request of 20 the review committee. 21 2. Each company providing telecommunications services in 22 this state by any means, including but not limited to mobile, 23 wireless, voice over internet protocol, and landline, shall on 24 or before a date specified by the director of revenue submit 25 to the department of revenue such information determined by 26 the director of revenue to be necessary to facilitate the 27 creation of the report required under this section, including 28 customer place of primary use information and customer service 29 address information within the meaning of section 423.20. 30 However, such companies shall not be required to resubmit any 31 information that was submitted to the director of revenue 32 pursuant to the requirements of chapter 433. Information 33 provided to the department under this section shall be verified 34 by the company’s president or secretary. The confidentiality 35 -4- LSB 2535SV (1) 85 md/sc 4/ 7

S.F. 454 provisions of sections 422.20 and 422.72 apply to all 1 information received by the department of revenue for purposes 2 of the report pursuant to this section and pursuant to chapter 3 433, if applicable. 4 Sec. 7. IMPLEMENTATION. Section 25B.7 shall not apply to 5 this Act. 6 Sec. 8. APPLICABILITY. This Act, except for the 7 section of this Act requiring the department of revenue 8 to study and report on the system for assessing and taxing 9 telecommunications company property, applies to assessment 10 years beginning on or after January 1, 2014. 11 EXPLANATION 12 This bill relates to the assessment and taxation of property 13 of companies that provide telecommunications services in this 14 state. 15 Under the bill, for assessment years beginning on or after 16 January 1, 2014, each telecommunications company assessed 17 for taxation under Code chapter 433 shall receive a partial 18 exemption from taxation on the value of the company’s property. 19 The amount of the exemption for each company shall be equal to 20 the lesser of 75 percent of the actual value of the property of 21 such company for that assessment year or $25,250,000. 22 The bill specifies the manner in which valuations and 23 exemption amounts are certified to local taxing jurisdictions 24 and the manner in which taxable value of telecommunications 25 company property is determined. 26 The bill requires the department of revenue, in consultation 27 with the department of management, representatives of companies 28 providing telecommunications services in this state, and other 29 interested persons to study the current system of assessing 30 telecommunications company property and levying property tax 31 against companies that provide telecommunications services 32 in this state and to make recommendations for changes. The 33 department of revenue is required to prepare and file a report 34 detailing recommendations for changes to the current system 35 -5- LSB 2535SV (1) 85 md/sc 5/ 7

S.F. 454 of assessing telecommunications company property and levying 1 property tax against companies providing telecommunications 2 services in this state. The report must also include 3 recommendations for establishing methods to provide 4 equivalent property tax treatment for all companies providing 5 telecommunications services in this state and recommendations 6 for apportioning property tax revenues to the appropriate 7 local taxing authorities in the state. The report is further 8 required to include proposed legislation to implement the 9 recommendations contained in the report. The report must be 10 filed by the department of revenue with the chairpersons and 11 ranking members of the ways and means committees of the senate 12 and the house of representatives and with the legislative 13 services agency by August 1, 2015. 14 Upon receipt of the report by the chairpersons and ranking 15 members of the ways and means committees, a legislative 16 committee consisting of six members of the general assembly, 17 two appointed by the majority leader of the senate, one 18 appointed by the minority leader of the senate, two 19 appointed by the speaker of the house of representatives, 20 and one appointed by the minority leader of the house of 21 representatives, shall hold at least three meetings to review 22 the information and recommendations contained in the report. 23 The bill also includes requirements for each company 24 providing telecommunications services in this state to submit 25 information to the department of revenue to facilitate the 26 creation of the report. The confidentiality provisions of Code 27 sections 422.20 and 422.72 apply to all information received by 28 the department of revenue for purposes of the report. 29 The bill provides that Code section 25B.7, relating to the 30 obligation of the state to reimburse local jurisdictions for 31 property tax credits and exemptions enacted on or after January 32 1, 1997, does not apply to the exemption in the bill. 33 Except for the portion of the bill relating to the department 34 of revenue study and report, the bill applies to assessment 35 -6- LSB 2535SV (1) 85 md/sc 6/ 7