Senate Study Bill 3170 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR An Act relating to the property tax exemption for certain 1 broadband infrastructure. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 6032XC (2) 86 md/sc

S.F. _____ Section 1. Section 427.1, subsection 40, paragraph b, Code 1 2016, is amended to read as follows: 2 b. (1) The exemption shall apply to the installation of 3 broadband any of the following: 4 (a) Broadband infrastructure that facilitates broadband 5 service at or above twenty-five megabits per second of download 6 speed and three megabits per second of upload speed commenced 7 and completed on or after July 1, 2015, and before July 1, 8 2020, in a targeted service area, and used to deliver internet 9 services to the public. 10 (b) If the installation is funded in whole or in part using 11 financial assistance from the connect America fund administered 12 by the federal communications commission under 47 C.F.R. 13 pt. 54, subpt. D, broadband infrastructure that facilitates 14 broadband service at or above ten megabits per second of 15 download speed and one megabit per second of upload speed 16 commenced and completed on or after July 1, 2016, and before 17 July 1, 2022, in a targeted service area, and used to deliver 18 internet service to the public. 19 (2) A person claiming an exemption under this subsection 20 shall certify to the local assessor prior to commencement of 21 the installation that the broadband installation will take 22 place within a targeted service area and shall specify the 23 current number of homes, farms, schools, and businesses in the 24 targeted service area that were offered broadband service and 25 the download and upload speeds available prior to the broadband 26 infrastructure installation for which the exemption is claimed 27 and the number of homes, farms, schools, and businesses in the 28 targeted service area that will be offered broadband service 29 and the download and upload speeds that will be available as 30 a result of installation of the broadband infrastructure for 31 which the exemption is claimed. 32 Sec. 2. Section 427.1, subsection 40, paragraph f, 33 subparagraph (1), Code 2016, is amended by adding the following 34 new subparagraph division: 35 -1- LSB 6032XC (2) 86 md/sc 1/ 3

S.F. _____ NEW SUBPARAGRAPH DIVISION . (h) If applying for an exemption 1 for broadband infrastructure described in paragraph “b” , 2 subparagraph (1), subparagraph division (b), certification 3 from the office of the chief information officer that the 4 installation is funded in whole or in part using financial 5 assistance from the connect America fund administered by the 6 federal communications commission under 47 C.F.R. pt. 54, 7 subpt. D. 8 Sec. 3. IMPLEMENTATION OF ACT. Section 25B.7 shall not 9 apply to this Act. 10 EXPLANATION 11 The inclusion of this explanation does not constitute agreement with 12 the explanation’s substance by the members of the general assembly. 13 In 2015, a property tax exemption was enacted for broadband 14 infrastructure in a targeted service area for installations 15 commenced and completed on or after July 1, 2015, and before 16 July 1, 2020. To qualify for the exemption, the broadband 17 infrastructure must facilitate broadband service at or above 25 18 megabits per second of download speed and 3 megabits per second 19 of upload speed. The tax exemption is a 100 percent exemption 20 from taxation for a period of 10 years in an amount equal 21 to the actual value added by installation of the broadband 22 infrastructure. 23 This bill establishes a similar exemption for the value of 24 broadband infrastructure used to deliver internet service to 25 the public that facilitates broadband service at or above 10 26 megabits per second of download speed and 1 megabit per second 27 of upload speed if the installation is funded in whole or in 28 part using financial assistance from the connect America fund 29 administered by the federal communications commission, the 30 installation is commenced and completed on or after July 1, 31 2016, and before July 1, 2022, and the installation occurs in a 32 targeted service area. Under the bill, the office of the chief 33 information officer is charged with the duty of certifying that 34 the broadband infrastructure installation is funded in whole 35 -2- LSB 6032XC (2) 86 md/sc 2/ 3

S.F. _____ or in part using financial assistance from the connect America 1 fund administered by the federal communications commission. 2 Code section 25B.7 does not apply to the property tax 3 exemption in the bill. Code section 25B.7 provides that for a 4 property tax credit or exemption enacted on or after January 5 1, 1997, if a state appropriation made to fund the credit 6 or exemption is not sufficient to fully fund the credit or 7 exemption, the political subdivision is required to extend 8 to the taxpayer only that portion of the credit or exemption 9 estimated by the department of revenue to be funded by the 10 state appropriation. 11 -3- LSB 6032XC (2) 86 md/sc 3/ 3