House File 626 - Introduced HOUSE FILE 626 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 443) (SUCCESSOR TO HSB 73) A BILL FOR An Act relating to the processes for appealing tax matters in 1 this state by repealing the future repeal of the property 2 assessment appeal board, providing for the future repeal of 3 the state board of tax review, providing for appeals to the 4 director of revenue for certain tax matters and modifying 5 the powers and duties of the director of revenue, and 6 including effective date provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 1383HZ (2) 86 mm/sc

H.F. 626 DIVISION I 1 REPEAL OF FUTURE REPEAL OF PROPERTY ASSESSMENT APPEAL BOARD 2 Section 1. REPEAL. 2005 Iowa Acts, chapter 150, section 3 134, as amended by 2013 Iowa Acts, chapter 123, section 62, is 4 repealed. 5 DIVISION II 6 FUTURE REPEAL OF 7 STATE BOARD OF TAX REVIEW —— TRANSITION 8 Sec. 2. Section 421.1, Code 2015, is amended by adding the 9 following new subsection: 10 NEW SUBSECTION . 6. Future repeal. 11 a. Notwithstanding subsection 5 or any other provision of 12 law to the contrary, a party shall not appeal to the state 13 board, nor shall the state board accept for review, any 14 decision, order, directive, or assessment of the director of 15 revenue or the department on or after the effective date of 16 this division of this Act. 17 b. This section is repealed upon the occurrence of one of 18 the following, whichever is earlier: 19 (1) The final disposition by the state board of all cases 20 pending before the board on the effective date of this division 21 of this Act. The chairperson of the board shall notify the 22 Iowa Code editor upon the occurrence of this condition. 23 (2) July 1, 2016. 24 Sec. 3. EFFECTIVE UPON ENACTMENT. This division of this 25 Act, being deemed of immediate importance, takes effect upon 26 enactment. 27 DIVISION III 28 CORRESPONDING CHANGES RELATED TO DIVISION II 29 Sec. 4. Section 68B.35, subsection 2, paragraph e, Code 30 2015, is amended to read as follows: 31 e. Members of the state banking council, the ethics and 32 campaign disclosure board, the credit union review board, the 33 economic development authority, the employment appeal board, 34 the environmental protection commission, the health facilities 35 -1- LSB 1383HZ (2) 86 mm/sc 1/ 42

H.F. 626 council, the Iowa finance authority, the Iowa public employees’ 1 retirement system investment board, the board of the Iowa 2 lottery authority, the natural resource commission, the board 3 of parole, the petroleum underground storage tank fund board, 4 the public employment relations board, the state racing and 5 gaming commission, the state board of regents, the tax review 6 board, the transportation commission, the office of consumer 7 advocate, the utilities board, the Iowa telecommunications 8 and technology commission, and any full-time members of other 9 boards and commissions as defined under section 7E.4 who 10 receive an annual salary for their service on the board or 11 commission. The Iowa ethics and campaign disclosure board 12 shall conduct an annual review to determine if members of any 13 other board, commission, or authority should file a statement 14 and shall require the filing of a statement pursuant to rules 15 adopted pursuant to chapter 17A . 16 Sec. 5. Section 421.17, subsection 19, paragraph b, Code 17 2015, is amended to read as follows: 18 b. (1) The provisions of sections 17A.10 to 17A.18A 19 relating to contested cases shall not apply to any matters 20 involving the equalization of valuations of classes of property 21 as authorized by this chapter and chapter 441 . 22 (2) (a) This exemption from the provisions of sections 23 17A.10 to 17A.18A shall not apply to a hearing before the state 24 board of tax review. 25 (b) This subparagraph is repealed July 1, 2016. 26 (3) This exemption from the provisions of sections 17A.10 27 to 17A.18A shall not apply to a hearing before the director as 28 provided in section 441.49, subsection 5. 29 Sec. 6. Section 421.60, subsection 4, paragraph a, 30 unnumbered paragraph 1, Code 2015, is amended to read as 31 follows: 32 A prevailing taxpayer in an administrative hearing or a 33 court proceeding related to the determination, collection, or 34 refund of a tax, penalty, or interest may be awarded reasonable 35 -2- LSB 1383HZ (2) 86 mm/sc 2/ 42

H.F. 626 litigation costs by the department , state board of tax review, 1 or a court , that are incurred subsequent to the issuance of 2 the notice of assessment or denial of claim for refund in the 3 proceeding, based upon the following: 4 Sec. 7. Section 425.7, subsection 3, Code 2015, is amended 5 to read as follows: 6 3. a. If the director department of revenue determines 7 that a claim for homestead credit has been allowed by the board 8 of supervisors which is not justifiable under the law and not 9 substantiated by proper facts, the director department may, at 10 any time within thirty-six months from July 1 of the year in 11 which the claim is allowed, set aside the allowance. Notice 12 of the disallowance shall be given to the county auditor of 13 the county in which the claim has been improperly granted and 14 a written notice of the disallowance shall also be addressed 15 to the claimant at the claimant’s last known address. The 16 claimant or board of supervisors may appeal to the state board 17 of tax review pursuant to section 421.1, subsection 5 18 director of revenue within thirty days from the date of the 19 notice of disallowance . The director shall grant a hearing 20 and if, upon the hearing, the director determines that the 21 disallowance was incorrect, the director shall set aside the 22 disallowance. The director shall notify the claimant and 23 the board of supervisors of the result of the hearing. The 24 claimant or the board of supervisors may seek judicial review 25 of the action of the state board of tax review director of 26 revenue in accordance with chapter 17A . 27 b. If a claim is disallowed by the director department 28 of revenue and not appealed to the state board of tax review 29 director of revenue or appealed to the state board of tax 30 review director of revenue and thereafter upheld upon final 31 resolution, including any judicial review, any amounts of 32 credits allowed and paid from the homestead credit fund 33 including the penalty, if any, become a lien upon the property 34 on which credit was originally granted, if still in the hands 35 -3- LSB 1383HZ (2) 86 mm/sc 3/ 42

H.F. 626 of the claimant, and not in the hands of a bona fide purchaser, 1 and any amount so erroneously paid including the penalty, if 2 any, shall be collected by the county treasurer in the same 3 manner as other taxes and the collections shall be returned to 4 the department of revenue and credited to the homestead credit 5 fund. The director of revenue may institute legal proceedings 6 against a homestead credit claimant for the collection of 7 payments made on disallowed credits and the penalty, if any. 8 If a person makes a false claim or affidavit with fraudulent 9 intent to obtain the homestead credit, the person is guilty 10 of a fraudulent practice and the claim shall be disallowed in 11 full. If the credit has been paid, the amount of the credit 12 plus a penalty equal to twenty-five percent of the amount of 13 credit plus interest, at the rate in effect under section 14 421.7 , from the time of payment shall be collected by the 15 county treasurer in the same manner as other property taxes, 16 penalty, and interest are collected and when collected shall 17 be paid to the director of revenue. If a homestead credit is 18 disallowed and the claimant failed to give written notice to 19 the assessor as required by section 425.2 when the property 20 ceased to be used as a homestead by the claimant, a civil 21 penalty equal to five percent of the amount of the disallowed 22 credit is assessed against the claimant. 23 Sec. 8. Section 425.17, subsection 3, Code 2015, is amended 24 to read as follows: 25 3. “Gross rent” means rental paid at arm’s length for the 26 right of occupancy of a homestead or manufactured or mobile 27 home, including rent for space occupied by a manufactured or 28 mobile home not to exceed one acre. If the director department 29 of revenue determines that the landlord and tenant have 30 not dealt with each other at arm’s length, and the director 31 department of revenue is satisfied that the gross rent charged 32 was excessive, the director department shall adjust the gross 33 rent to a reasonable amount as determined by the director 34 department . 35 -4- LSB 1383HZ (2) 86 mm/sc 4/ 42

H.F. 626 Sec. 9. Section 425.18, Code 2015, is amended to read as 1 follows: 2 425.18 Right to file a claim. 3 The right to file a claim for reimbursement or credit under 4 this division may be exercised by the claimant or on behalf 5 of a claimant by the claimant’s legal guardian, spouse, or 6 attorney, or by the executor or administrator of the claimant’s 7 estate. If a claimant dies after having filed a claim for 8 reimbursement for rent constituting property taxes paid, the 9 amount of the reimbursement may be paid to another member of 10 the household as determined by the director department of 11 revenue . If the claimant was the only member of the household, 12 the reimbursement may be paid to the claimant’s executor or 13 administrator, but if neither is appointed and qualified 14 within one year from the date of the filing of the claim, the 15 reimbursement shall escheat to the state. If a claimant dies 16 after having filed a claim for credit for property taxes due, 17 the amount of credit shall be paid as if the claimant had not 18 died. 19 Sec. 10. Section 425.26, subsection 2, Code 2015, is amended 20 to read as follows: 21 2. The director department may require any additional proof 22 necessary to support a claim. 23 Sec. 11. Section 425.27, Code 2015, is amended to read as 24 follows: 25 425.27 Audit —— recalculation or denial —— appeals . 26 If on the audit of a claim for credit or reimbursement 27 under this division , the director department of revenue 28 determines the amount of the claim to have been incorrectly 29 calculated or that the claim is not allowable, the director 30 department shall recalculate the claim and notify the claimant 31 of the recalculation or denial and the reasons for it. The 32 recalculation of the claim shall be final unless appealed to 33 the director within thirty days from the date of notice of 34 recalculation or denial. The director shall grant a hearing, 35 -5- LSB 1383HZ (2) 86 mm/sc 5/ 42

H.F. 626 and upon hearing determine the correct claim, if any, and 1 notify the claimant of the decision by mail. The director 2 department of revenue shall not adjust a claim after three 3 years from October 31 of the year in which the claim was filed. 4 If the claim for reimbursement has been paid, the amount may 5 be recovered by assessment in the same manner that income 6 taxes are assessed under sections 422.26 and 422.30 . If the 7 claim for credit has been paid, the director department of 8 revenue shall give notification to the claimant and the county 9 treasurer of the recalculation or denial of the claim and the 10 county treasurer shall proceed to collect the tax owed in 11 the same manner as other property taxes due and payable are 12 collected, if the property on which the credit was granted 13 is still owned by the claimant, and repay the amount to 14 the director upon collection. If the property on which the 15 credit was granted is not owned by the claimant, the amount 16 may be recovered from the claimant by assessment in the same 17 manner that income taxes are assessed under sections 422.26 18 and 422.30 . The recalculation of the claim decision of the 19 director shall be final unless appealed as provided in section 20 425.31 . Section 422.70 is applicable with respect to this 21 division . 22 Sec. 12. Section 425.29, Code 2015, is amended to read as 23 follows: 24 425.29 False claim —— penalty. 25 A person who makes a false affidavit for the purpose 26 of obtaining credit or reimbursement provided for in this 27 division or who knowingly receives the credit or reimbursement 28 without being legally entitled to it or makes claim for the 29 credit or reimbursement in more than one county in the state 30 without being legally entitled to it is guilty of a fraudulent 31 practice. The claim for credit or reimbursement shall be 32 disallowed in full and if the claim has been paid the amount 33 shall be recovered in the manner provided in section 425.27 . 34 The director department of revenue shall send a notice of 35 -6- LSB 1383HZ (2) 86 mm/sc 6/ 42

H.F. 626 disallowance of the claim. 1 Sec. 13. Section 425.31, Code 2015, is amended to read as 2 follows: 3 425.31 Appeals. 4 Any person aggrieved by an act or decision of the director 5 of revenue or the department of revenue under this division 6 shall have the same rights of appeal and review as provided 7 in sections 421.1 and section 423.38 and the rules of the 8 department of revenue. 9 Sec. 14. Section 426A.6, Code 2015, is amended to read as 10 follows: 11 426A.6 Setting aside allowance. 12 If the director department of revenue determines that a 13 claim for military service tax exemption has been allowed by a 14 board of supervisors which is not justifiable under the law and 15 not substantiated by proper facts, the director department may, 16 at any time within thirty-six months from July 1 of the year in 17 which the claim is allowed, set aside the allowance. Notice 18 of the disallowance shall be given to the county auditor of 19 the county in which the claim has been improperly granted and 20 a written notice of the disallowance shall also be addressed 21 to the claimant at the claimant’s last known address. The 22 claimant or the board of supervisors may appeal to the state 23 board of tax review pursuant to section 421.1, subsection 5 24 director of revenue within thirty days from the date of the 25 notice of disallowance. The director shall grant a hearing 26 and if, upon the hearing, the director determines that the 27 disallowance was incorrect, the director shall set aside 28 the disallowance. The director shall notify the claimant 29 and the board of supervisors of the result of the hearing . 30 The claimant or the board of supervisors may seek judicial 31 review of the action of the state board of tax review director 32 of revenue in accordance with chapter 17A . If a claim is 33 disallowed by the director department of revenue and not 34 appealed to the state board of tax review director of revenue 35 -7- LSB 1383HZ (2) 86 mm/sc 7/ 42

H.F. 626 or appealed to the state board of tax review director of 1 revenue and thereafter upheld upon final resolution, including 2 judicial review, the credits allowed and paid from the general 3 fund of the state become a lien upon the property on which 4 the credit was originally granted, if still in the hands of 5 the claimant and not in the hands of a bona fide purchaser, 6 the amount so erroneously paid shall be collected by the 7 county treasurer in the same manner as other taxes, and the 8 collections shall be returned to the department of revenue 9 and credited to the general fund of the state. The director 10 of revenue may institute legal proceedings against a military 11 service tax exemption claimant for the collection of payments 12 made on disallowed exemptions. 13 Sec. 15. Section 426C.7, Code 2015, is amended to read as 14 follows: 15 426C.7 Audit —— recalculation or denial. 16 1. If on the audit of a credit provided under this chapter , 17 the director department of revenue determines the amount of the 18 credit to have been incorrectly calculated or that the credit 19 is not allowable, the director department shall recalculate the 20 credit and notify the claimant and the county auditor of the 21 recalculation or denial and the reasons for it. The director 22 department shall not adjust a credit after three years from 23 October 31 of the year in which the claim for the credit was 24 filed. If the credit has been paid, the director department 25 shall give notification to the claimant, the county treasurer, 26 and the applicable assessor of the recalculation or denial of 27 the credit and the county treasurer shall proceed to collect 28 the tax owed in the same manner as other property taxes due 29 and payable are collected, if the parcel or property unit for 30 which the credit was allowed is still owned by the claimant. 31 If the parcel or property unit for which the credit was allowed 32 is not owned by the claimant, the amount may be recovered from 33 the claimant by assessment in the same manner that income taxes 34 are assessed under sections 422.26 and 422.30 . The amount of 35 -8- LSB 1383HZ (2) 86 mm/sc 8/ 42

H.F. 626 such erroneous credit, when collected, shall be deposited in 1 the fund. 2 2. The claimant or board of supervisors may appeal any 3 decision of the director department of revenue to the state 4 board of tax review pursuant to section 421.1, subsection 5 5 director of revenue within thirty days from the date of the 6 notice of the recalculation or denial provided to the claimant 7 and county auditor . The director shall grant a hearing, and 8 upon hearing the director shall determine the correct credit, 9 if any, and notify the claimant, board of supervisors, county 10 auditor, and county treasurer of the decision by mail. The 11 claimant , or the board of supervisors , or the director of 12 revenue may seek judicial review of the action of the state 13 board of tax review director of revenue in accordance with 14 chapter 17A . 15 Sec. 16. Section 426C.8, Code 2015, is amended to read as 16 follows: 17 426C.8 False claim —— penalty. 18 A person who makes a false claim for the purpose of obtaining 19 a credit provided for in this chapter or who knowingly receives 20 the credit without being legally entitled to it is guilty of a 21 fraudulent practice. The claim for a credit of such a person 22 shall be disallowed and if the credit has been paid the amount 23 shall be recovered in the manner provided in section 426C.7 . 24 In such cases, the director department of revenue shall send a 25 notice of disallowance of the credit. 26 Sec. 17. Section 428.28, Code 2015, is amended to read as 27 follows: 28 428.28 Annual report by utility. 29 1. Every individual, partnership, corporation, or 30 association operating for profit, waterworks, other than 31 waterworks taxed under chapter 437B , or gasworks or pipelines 32 other than natural gas pipelines permitted pursuant to 33 chapter 479 , annually on or before May 1 of each calendar 34 year, shall make a report on blanks to be provided by the 35 -9- LSB 1383HZ (2) 86 mm/sc 9/ 42

H.F. 626 department of revenue of all of the property owned by such 1 individual, partnership, corporation, or association within the 2 incorporated limits of any city in the state, and give such 3 other information as the director department of revenue shall 4 require. 5 2. Every individual, partnership, corporation, or 6 association which operates a public utility on a nonprofit 7 basis other than a utility subject to tax under chapter 437A 8 or chapter 437B , as defined in section 428.24 shall annually, 9 on or before May 1 of each calendar year, make a report on 10 blanks to be provided by the department of revenue of all of 11 the property owned by the individual, partnership, corporation, 12 or association within the incorporated limits of any city in 13 the state, and give other information the director department 14 of revenue requires. 15 Sec. 18. Section 428.29, Code 2015, is amended to read as 16 follows: 17 428.29 Assessment and certification. 18 The director department of revenue shall on or before 19 October 31 each year proceed to determine, upon the basis 20 of the data required in the report under section 428.28 and 21 any other information the director department may obtain, 22 the actual value of all property, subject to the director’s 23 department’s jurisdiction, of said individual, partnership, 24 corporation, or association, and shall make assessments upon 25 the taxable value of the property, as provided by section 26 441.21 . The director department of revenue shall, on or before 27 October 31, certify to the county auditor of every county in 28 the state the valuations fixed for assessment upon all such 29 property in each and every taxing district in each county by 30 the department of revenue. This valuation shall then be spread 31 upon the books in the same manner as other valuations fixed 32 by the department of revenue upon property assessed under the 33 department’s jurisdiction. 34 Sec. 19. Section 429.1, Code 2015, is amended to read as 35 -10- LSB 1383HZ (2) 86 mm/sc 10/ 42

H.F. 626 follows: 1 429.1 Notice of assessment. 2 The director department of revenue shall, at the time of 3 making the assessment of property as provided in chapters 428 , 4 433 , 434 , 437 , and 438 , inform the person assessed, by mail, 5 of the valuation put upon the taxpayer’s property. The notice 6 shall contain a notice of the taxpayer’s right of appeal to the 7 state board of tax review director of revenue as provided in 8 section 429.2 . 9 Sec. 20. Section 429.2, Code 2015, is amended to read as 10 follows: 11 429.2 Appeal. 12 1. Notwithstanding the provisions of chapter 17A , the The 13 taxpayer shall have thirty days from the date of the notice of 14 assessment to appeal the assessment to the state board of tax 15 review director of revenue . Thereafter, the proceedings before 16 the state board of tax review director of revenue shall conform 17 to the provisions of subsection 2 , section 421.1, subsection 18 5 , and chapter 17A . 19 2. The following rules shall apply to the appeal proceedings 20 in addition to those stated in section 421.1, subsection 5 , and 21 chapter 17A : 22 a. The department’s assessment shall be presumed correct 23 and the burden of proof shall be on the taxpayer with respect 24 to all issues raised on appeal, including any challenge of the 25 director’s department’s valuation. 26 b. The burden of proof must be carried by a preponderance of 27 the evidence. 28 c. The board director of revenue shall consider all evidence 29 and witnesses offered by the taxpayer and the department , 30 including , but not limited to , evidence relating to the proper 31 valuation of the property involved. 32 d. The board director of revenue shall make an independent 33 determination of the value of the property based solely upon 34 its the director’s review of the evidence presented. 35 -11- LSB 1383HZ (2) 86 mm/sc 11/ 42

H.F. 626 e. Upon the request of a party , the board director of 1 revenue shall set the case for hearing within one year of 2 the date of the request, unless for good cause shown, by 3 application and ruling thereon after notice and not ex parte, 4 the hearing date is continued by the board director of revenue . 5 Sec. 21. Section 429.3, Code 2015, is amended to read as 6 follows: 7 429.3 Judicial review. 8 Judicial review of the action of the state board of tax 9 review director of revenue may be sought by the taxpayer or the 10 director of revenue in accordance with the terms of chapter 11 17A . 12 Sec. 22. Section 433.1, unnumbered paragraph 1, Code 2015, 13 is amended to read as follows: 14 Every telegraph and telephone company operating a line in 15 this state shall, on or before the first day of May in each 16 year, furnish to the director department of revenue a statement 17 verified by its president or secretary showing: 18 Sec. 23. Section 433.2, Code 2015, is amended to read as 19 follows: 20 433.2 Additional statement. 21 Upon the receipt of the statements required in section 433.1 22 from the several companies, the director department of revenue 23 shall examine the statements. If the director department deems 24 the statements insufficient and that further information is 25 requisite, the director department shall require the officer 26 making the statements to make such other or further statement 27 as the director department may desire. 28 Sec. 24. Section 433.3, Code 2015, is amended to read as 29 follows: 30 433.3 Failure to make statement. 31 In case of failure or refusal of any company to make out or 32 deliver to the director department of revenue the statements 33 required in section 433.1 , such company shall forfeit and pay 34 to the state one hundred dollars for each day such report is 35 -12- LSB 1383HZ (2) 86 mm/sc 12/ 42

H.F. 626 delayed beyond the first day of May, to be sued and recovered 1 in any proper form of action in the name of the state, and on 2 the relation of the director of revenue, and such penalty, when 3 collected, shall be paid into the general fund of the state. 4 Sec. 25. Section 433.4, subsection 1, Code 2015, is amended 5 to read as follows: 6 1. The director department of revenue shall on or before 7 October 31 each year, find the actual value of the property of 8 telegraph and telephone companies in this state that is used 9 by the companies in the transaction of telegraph and telephone 10 business, taking into consideration the information obtained 11 from the statements required, and any further information the 12 director department can obtain, using the same as a means for 13 determining the actual value of the property of the companies 14 within this state. The director department shall also take 15 into consideration the valuation of all property of the 16 companies, including franchises and the use of the property 17 in connection with lines outside the state, and making these 18 deductions as may be necessary on account of extra value of 19 property outside the state as compared with the value of 20 property in the state, in order that the actual value of the 21 property of the company within this state may be ascertained. 22 The assessment shall include all property of every kind 23 and character whatsoever, real, personal, or mixed, used by 24 the companies in the transaction of telegraph and telephone 25 business. The property so included in the assessment shall not 26 be taxed in any other manner than as provided in this chapter . 27 Sec. 26. Section 433.5, Code 2015, is amended to read as 28 follows: 29 433.5 Actual value per mile —— exemption value per mile. 30 1. The director department of revenue shall ascertain the 31 actual value per mile of the property of each company within 32 this state by dividing the total actual value, as ascertained 33 under section 433.4, subsection 1 , by the number of miles of 34 line of such company within the state, and the result shall be 35 -13- LSB 1383HZ (2) 86 mm/sc 13/ 42

H.F. 626 deemed and held to be the actual value per mile of line of the 1 property of such company within this state. 2 2. The director department of revenue shall ascertain the 3 exemption value per mile of the property of each company within 4 this state by dividing the amount of the exemption for that 5 company determined under section 433.4, subsection 2 , by the 6 number of miles of line of such company within the state, and 7 the result shall be deemed and held to be the exemption value 8 per mile of line for that company. 9 Sec. 27. Section 433.7, Code 2015, is amended to read as 10 follows: 11 433.7 Hearing. 12 At the time of determination of value by the director 13 department of revenue, any company interested shall have the 14 right to appear, by its officers or agents, before the director 15 department of revenue and be heard on the question of the 16 valuation of its property for taxation. 17 Sec. 28. Section 433.8, Code 2015, is amended to read as 18 follows: 19 433.8 Assessment in each county —— how certified. 20 The director department of revenue shall, for the purpose 21 of determining what amount shall be assessed to each company 22 in each county of the state into which the line of the said 23 company extends, certify to the several county auditors of the 24 respective counties into, over, or through which said line 25 extends the number of miles of line in the county for that 26 company, the actual value per mile of line for that company, 27 and the exemption value per mile of line for that company. 28 Sec. 29. Section 433.9, Code 2015, is amended to read as 29 follows: 30 433.9 Entry of certificate. 31 At the first meeting of the board of supervisors held after 32 the certification made under section 433.8 is received by 33 the county auditor, the board shall cause such certification 34 to be entered in its minute book, and make and enter therein 35 -14- LSB 1383HZ (2) 86 mm/sc 14/ 42

H.F. 626 an order stating the length of the lines, the actual value 1 of the property, and the exempted value of the property of 2 each of said companies situated in each city, township, or 3 lesser taxing district in its county, as fixed by the director 4 department of revenue. The value certified by the director 5 department of revenue, following application of the percentage 6 of actual value under section 441.21 , and following the 7 application of the exemption value certified by the director 8 department of revenue, shall constitute the taxable value 9 of said property for taxing purposes, and the taxes on said 10 property when collected by the county treasurer shall be 11 disposed of as other taxes on real estate. The county auditor 12 shall transmit a copy of said order to the council or trustees 13 of each city or township in which the lines of said company 14 extend. 15 Sec. 30. Section 434.2, unnumbered paragraph 1, Code 2015, 16 is amended to read as follows: 17 On or before October 31 each year, the director department 18 of revenue shall assess all the property of each railway 19 corporation in the state, excepting the lands, lots, and other 20 real estate belonging thereto not used in the operation of any 21 railway, and excepting railway bridges across the Mississippi 22 and Missouri rivers, and excepting grain elevators; and for 23 the purpose of making such assessment its president, vice 24 president, general manager, general superintendent, receiver, 25 or such other officer as the director department of revenue 26 may designate, shall, on or before the first day of April 27 in each year, furnish the department of revenue a verified 28 statement showing in detail for the year ended December 31 next 29 preceding: 30 Sec. 31. Section 434.2, subsection 8, Code 2015, is amended 31 to read as follows: 32 8. Any and all other movable property owned by said railway 33 within the state, classified and scheduled in such manner as 34 may be required by the director department of revenue. 35 -15- LSB 1383HZ (2) 86 mm/sc 15/ 42

H.F. 626 Sec. 32. Section 434.12, Code 2015, is amended to read as 1 follows: 2 434.12 Refusal to obey. 3 If any railway company shall fail or refuse to obey or 4 conform to the rules, regulations, method, and requirements 5 so made or prescribed by the director of revenue under the 6 provisions of sections 434.7 to 434.11 or to make the reports 7 therein provided, the director department of revenue shall 8 proceed to assess the property of such railway company so 9 failing or refusing, according to the best information 10 obtainable, and shall then add to the taxable valuation of such 11 railway company twenty-five percent thereof, which valuation 12 and penalty shall be separately shown, and together shall 13 constitute the assessment for that year. 14 Sec. 33. Section 434.14, Code 2015, is amended to read as 15 follows: 16 434.14 Amended statement. 17 The director department of revenue may demand, in writing, 18 detailed, explanatory, and amended statements of any of the 19 items mentioned in section 434.2 , or any other items deemed by 20 the director department important, to be furnished the director 21 department by such railway corporation within thirty days 22 from such demand, in such form as the director department may 23 designate, which shall be verified as required for the original 24 statement. The returns, both original and amended, shall show 25 such other facts as the director department , in writing, shall 26 require. 27 Sec. 34. Section 434.15, unnumbered paragraph 1, Code 2015, 28 is amended to read as follows: 29 The said property shall be valued at its actual value, and 30 the assessments shall be made upon the taxable value of the 31 entire railway within the state, except as otherwise provided, 32 and the actual value so ascertained shall be assessed as 33 provided by section 441.21 , and shall include the right-of-way, 34 roadbed, bridges, culverts, rolling stock, depots, station 35 -16- LSB 1383HZ (2) 86 mm/sc 16/ 42

H.F. 626 grounds, shops, buildings, gravel beds, and all other property, 1 real and personal, exclusively used in the operation of such 2 railway. In assessing said railway and its equipments, the 3 director department of revenue shall take into consideration 4 the gross earnings per mile for the year ending January 1, 5 preceding, and any and all other matters necessary to enable 6 the director department to make a just and equitable assessment 7 of said railway property. If a part of any railway is without 8 this state, then, in estimating the value of its rolling stock 9 and movable property, the director department shall take into 10 consideration the proportion which the business of that part 11 of the railway lying within the state bears to the business of 12 the railway without this state. 13 Sec. 35. Section 434.16, Code 2015, is amended to read as 14 follows: 15 434.16 Assessment of sleeping and dining cars. 16 The director department of revenue shall, at the time of 17 the assessment of other railway property for taxation, assess 18 for taxation the average number of sleeping and dining cars 19 as provided in section 434.6 so used by such corporation each 20 month and the assessed value of said cars shall bear the same 21 proportion to the entire value thereof that the monthly average 22 number of miles such cars have been run or operated within 23 the state shall bear to the monthly average number of miles 24 such cars have been used or operated within and without the 25 state. Such valuation shall be in the same ratio as that of 26 the property of individuals, and shall be added to the assessed 27 valuation of the corporation, fixed under section 434.15 . 28 Sec. 36. Section 434.17, Code 2015, is amended to read as 29 follows: 30 434.17 Certification to county auditors. 31 On or before October 31 each year, the director department of 32 revenue shall transmit to the county auditor of each county, 33 through and into which any railway may extend, a statement 34 showing the length of the main track within the county, and 35 -17- LSB 1383HZ (2) 86 mm/sc 17/ 42

H.F. 626 the assessed value per mile of the same, as fixed by a ratable 1 distribution per mile of the assessed valuation of the whole 2 property. 3 Sec. 37. Section 434.22, Code 2015, is amended to read as 4 follows: 5 434.22 Levy and collection of tax. 6 At the first meeting of the board of supervisors held after 7 said statement is received by the county auditor, the board 8 shall cause the same to be entered on its minute book, and make 9 and enter in the minute book an order stating the length of 10 the main track and the assessed value of each railway lying in 11 each city, township, or lesser taxing district in its county, 12 through or into which the railway extends, as fixed by the 13 director department of revenue, which shall constitute the 14 taxable value of the property for taxing purposes; and the 15 taxes on the property, when collected by the county treasurer, 16 shall be disposed of as other taxes. The county auditor shall 17 transmit a copy of the order to the council or trustees of the 18 city or township. 19 Sec. 38. Section 437.2, unnumbered paragraph 1, Code 2015, 20 is amended to read as follows: 21 Every company owning or operating a transmission line or 22 lines for the conduct of electric energy and which line or 23 lines are located within the state, and which said line or 24 lines are also located wholly or partly outside cities, shall, 25 on or before the first day of May in each year, furnish to the 26 director department of revenue a verified statement as to its 27 entire line or lines within this state, when all of said line 28 or lines are located outside cities, and as to such portion 29 of its line or lines within this state as are located outside 30 cities, when such line or lines are located partly outside and 31 partly inside cities, showing: 32 Sec. 39. Section 437.4, Code 2015, is amended to read as 33 follows: 34 437.4 Additional statement. 35 -18- LSB 1383HZ (2) 86 mm/sc 18/ 42