House File 607 - IntroducedA Bill ForAn Act 1excluding from the state corporate income tax certain
2income of public utilities furnishing water to the public,
3or furnishing sanitary sewage or storm water drainage
4disposal to the public, and including effective date and
5applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 422.35, Code 2021, is amended by adding
2the following new subsection:
3   NEW SUBSECTION.  31.  Subtract, to the extent included, the
4income of a public utility regulated by the utilities board
5derived from the operation of a system described in section
6476.1, subsection 3, paragraph “c” or “d”.
7   Sec. 2.  Section 476.6, Code 2021, is amended by adding the
8following new subsection:
9   NEW SUBSECTION.  22.  State corporate income tax exemption —
10customer benefits.
  Customers of a public utility shall receive
11the full benefits of a utility’s reduced state corporate income
12tax as provided in section 422.35, subsection 31. The board
13shall approve rates with provision for adjustments to ensure
14that the rates are accurate and that customers receive the full
15benefits.
16   Sec. 3.  EFFECTIVE DATE.  The following takes effect January
171, 2023:
   18The section of this Act amending section 422.35.
19   Sec. 4.  APPLICABILITY.  The following applies to tax years
20beginning on or after January 1, 2023:
   21The section of this Act amending section 422.35.
22EXPLANATION
23The inclusion of this explanation does not constitute agreement with
24the explanation’s substance by the members of the general assembly.
   25This bill excludes from the state corporate income tax the
26income of a public utility regulated by the utilities board
27derived from the operation of a system that furnishes water by
28piped distribution system to the public for compensation, or
29furnishes sanitary sewage or storm water drainage disposal by
30piped collection system to the public for compensation. This
31provision of the bill takes effect January 1, 2023, and applies
32to tax years beginning on or after that date.
   33The bill also requires the customers of a public utility
34to receive the full benefits of a utility’s reduced state
35corporate income tax that result from the bill. The bill
-1-1requires the utilities board to approve rates that ensure that
2customers receive such benefits.
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