House File 673 - Reprinted HOUSE FILE 673 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 214) (As Amended and Passed by the House April 18, 2011 ) A BILL FOR An Act relating to the assessment of telecommunications company 1 property for purposes of property taxation, and including 2 effective date and applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 HF 673 (3) 84 md/sc/mb

H.F. 673 Section 1. Section 427A.1, subsection 1, paragraph h, Code 1 2011, is amended by striking the paragraph and inserting in 2 lieu thereof the following: 3 h. Property assessed by the department of revenue pursuant 4 to any of the following: 5 (1) Sections 428.24 to 428.29. 6 (2) Chapter 433 if such property is owned by a qualifying 7 local exchange carrier, as defined in section 433.16. 8 (3) Chapter 433 if such property is not owned by a 9 qualifying local exchange carrier, as defined in section 10 433.16, and was first assessed for taxation in this state 11 before January 1, 1996. 12 (4) Chapter 434. 13 (5) Chapter 437. 14 (6) Chapter 437A. 15 (7) Chapter 438. 16 Sec. 2. Section 433.4, Code 2011, is amended to read as 17 follows: 18 433.4 Assessment. 19 1. The Except as otherwise provided in section 433.16, 20 the director of revenue shall on or before October 31 each 21 year, proceed to find the actual value of the property of 22 these companies in this state that are not qualifying local 23 exchange carriers as defined in section 433.16 , taking into 24 consideration the information obtained from the statements 25 required, and any further information the director can obtain , 26 using the same as a means for determining the actual cash value 27 of the property of these companies within this state . 28 2. The For company property that was first assessed for 29 taxation in this state before January 1, 1996, the director 30 shall also take into consideration the information described 31 in subsection 1 and the valuation of all property of these 32 companies, including franchises and the use of the property 33 in connection with lines outside the state, and making these 34 deductions as may be necessary on account of extra value 35 -1- HF 673 (3) 84 md/sc/mb 1/ 4

H.F. 673 of property outside the state as compared with the value 1 of property in the state, in order that the actual cash 2 value of the property of the company within this state may 3 be ascertained. The assessment shall include all property 4 of every kind and character whatsoever, real, personal, or 5 mixed, used by the companies in the transaction of telegraph 6 and telephone business; and the property so included in the 7 assessment shall not be taxed in any other manner than as 8 provided in this chapter . 9 3. For company property that was first assessed for taxation 10 in this state on or after January 1, 1996, and not otherwise 11 assessed under section 476.1D, subsection 10, the director 12 shall determine the value of such property within this state 13 as follows: 14 a. For the assessment years beginning on or after January 1, 15 2012, but before January 1, 2018, the value of such property 16 for each company shall equal the sum of the value of the 17 property assessed in the manner as all other property assessed 18 as commercial property pursuant to chapters 427, 427A, 427B, 19 428, and 441, and the telecommunications company adjustment for 20 the applicable assessment year. 21 b. Each company’s base value shall be the total assessed 22 value of such company property assessed pursuant to section 23 433.4, Code 2011, for the assessment year beginning January 1, 24 2011. However, if the company adds or disposes of an amount of 25 such property exceeding ten percent of the company’s assessed 26 value of such property for the assessment year beginning 27 January 1, 2011, or ten percent of the base value most recently 28 adjusted under this paragraph, the company’s base value shall 29 be adjusted to reflect those additions or dispositions. 30 c. The telecommunications company adjustment shall be 31 determined as follows: 32 (1) For the assessment year beginning January 1, 2012, the 33 telecommunications company adjustment shall equal eighty-five 34 percent of the difference between the company’s base value and 35 -2- HF 673 (3) 84 md/sc/mb 2/ 4

H.F. 673 the assessed value of such company property when assessed in 1 the same manner as all other property assessed as commercial 2 property under chapters 427, 427A, 427B, 428, and 441. 3 (2) For the assessment year beginning January 1, 2013, 4 the telecommunications company adjustment shall equal seventy 5 percent of the difference between the company’s base value and 6 the assessed value of such company property when assessed in 7 the same manner as all other property assessed as commercial 8 property under chapters 427, 427A, 427B, 428, and 441. 9 (3) For the assessment year beginning January 1, 2014, the 10 telecommunications company adjustment shall equal fifty-five 11 percent of the difference between the company’s base value and 12 the assessed value of such company property when assessed in 13 the same manner as all other property assessed as commercial 14 property under chapters 427, 427A, 427B, 428, and 441. 15 (4) For the assessment year beginning January 1, 2015, 16 the telecommunications company adjustment shall equal forty 17 percent of the difference between the company’s base value and 18 the assessed value of such company property when assessed in 19 the same manner as all other property assessed as commercial 20 property under chapters 427, 427A, 427B, 428, and 441. 21 (5) For the assessment year beginning January 1, 2016, the 22 telecommunications company adjustment shall equal twenty-five 23 percent of the difference between the company’s base value and 24 the assessed value of such company property when assessed in 25 the same manner as all other property assessed as commercial 26 property under chapters 427, 427A, 427B, 428, and 441. 27 (6) For the assessment year beginning January 1, 2017, 28 the telecommunications company adjustment shall equal ten 29 percent of the difference between the company’s base value and 30 the assessed value of such company property when assessed in 31 the same manner as all other property assessed as commercial 32 property under chapters 427, 427A, 427B, 428, and 441. 33 d. For the assessment year beginning January 1, 2018, 34 and each assessment year thereafter, such property shall be 35 -3- HF 673 (3) 84 md/sc/mb 3/ 4

H.F. 673 assessed by the director of revenue in the same manner as all 1 other property assessed as commercial property by the local 2 assessor under chapters 427, 427A, 427B, 428, and 441. 3 Sec. 3. NEW SECTION . 433.16 Qualifying local exchange 4 carriers —— assessment. 5 For assessment years beginning on or after January 1, 2012, 6 the property of qualifying local exchange carriers shall 7 be assessed for taxation by the director of revenue under 8 the provisions of section 433.4, Code 2011. For purposes 9 of this section, “qualifying local exchange carrier” means a 10 telecommunications company that provides local exchange service 11 and has less than fifty thousand customer access lines located 12 in this state. 13 Sec. 4. Section 476.1D, subsection 10, unnumbered paragraph 14 2, Code 2011, is amended by striking the unnumbered paragraph. 15 Sec. 5. EFFECTIVE DATE. 16 1. Except as provided in subsection 2, this Act takes effect 17 July, 1, 2011. 18 2. The section of this Act amending section 476.1D takes 19 effect July 1, 2017. 20 Sec. 6. APPLICABILITY. 21 1. Except as provided in subsection 2, this Act applies to 22 assessment years beginning on or after January 1, 2012. 23 2. The section of this Act amending section 476.1D applies 24 to assessment years beginning on or after January 1, 2018. 25 -4- HF 673 (3) 84 md/sc/mb 4/ 4