House Study Bill 223



                                    HOUSE FILE       
                                    BY  (PROPOSED COMMITTEE ON
                                        WAYS AND MEANS BILL BY
                                        CHAIRPERSON SANDS)

                                         A BILL FOR

     1 An Act relating to the assessment and taxation of
     2    telecommunications company property and including
     3    applicability provisions.
     4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN



  1  1    Section 1.  Section 433.4, Code 2013, is amended to read as
  1  2 follows:
  1  3    433.4  Assessment.
  1  4    1.  The director of revenue shall on or before October
  1  5 31 each year, proceed to find the actual value of the real
  1  6  property of these companies in this state used by the companies
  1  7 in the transaction of telegraph and telephone business, taking
  1  8 into consideration the information obtained from the statements
  1  9 required, and any further information the director can obtain,
  1 10 using the same as a means for determining the actual cash value
  1 11 of the property of these companies within this state. The
  1 12 director shall also take into consideration the valuation of
  1 13 all property of these companies, including franchises and the
  1 14 use of the property in connection with lines outside the state,
  1 15 and making these deductions as may be necessary on account of
  1 16 extra value of property outside the state as compared with the
  1 17 value of property in the state, in order that the actual cash
  1 18  value of the real property of the company within this state
  1 19 may be ascertained. The assessment shall include all property
  1 20 of every kind and character whatsoever, real, personal, or
  1 21 mixed, used by the companies in the transaction of telegraph
  1 22 and telephone business; and the The property so included in
  1 23 the assessment shall not be taxed in any other manner than as
  1 24 provided in this chapter.
  1 25    2.  For assessment years beginning on or after January
  1 26 1, 2014, except as specifically provided in this chapter, a
  1 27 company's real property shall be subject to assessment and
  1 28 taxation under this chapter by the director of revenue in
  1 29 the same manner as property assessed and taxed as commercial
  1 30 property under chapters 427, 427A, 427B, 428, and 441.
  1 31    Sec. 2.  Section 441.21, subsection 5, Code 2013, is amended
  1 32 to read as follows:
  1 33    5.  For valuations established as of January 1, 1979,
  1 34 commercial property and industrial property, excluding
  1 35 properties referred to in section 427A.1, subsection 8, shall
  2  1 be assessed as a percentage of the actual value of each class
  2  2 of property. The percentage shall be determined for each
  2  3 class of property by the director of revenue for the state in
  2  4 accordance with the provisions of this section. For valuations
  2  5 established as of January 1, 1979, the percentage shall be
  2  6 the quotient of the dividend and divisor as defined in this
  2  7 section. The dividend for each class of property shall be the
  2  8 total actual valuation for each class of property established
  2  9 for 1978, plus six percent of the amount so determined. The
  2 10 divisor for each class of property shall be the valuation
  2 11 for each class of property established for 1978, as reported
  2 12 by the assessors on the abstracts of assessment for 1978,
  2 13 plus the amount of value added to the total actual value by
  2 14 the revaluation of existing properties in 1979 as equalized
  2 15 by the director of revenue pursuant to section 441.49. For
  2 16 valuations established as of January 1, 1979, property valued
  2 17 by the department of revenue pursuant to chapters 428, 433,
  2 18  437, and 438 shall be considered as one class of property and
  2 19 shall be assessed as a percentage of its actual value. The
  2 20 percentage shall be determined by the director of revenue in
  2 21 accordance with the provisions of this section. For valuations
  2 22 established as of January 1, 1979, the percentage shall be
  2 23 the quotient of the dividend and divisor as defined in this
  2 24 section. The dividend shall be the total actual valuation
  2 25 established for 1978 by the department of revenue, plus ten
  2 26 percent of the amount so determined. The divisor for property
  2 27 valued by the department of revenue pursuant to chapters 428,
  2 28 433, 437, and 438 shall be the valuation established for 1978,
  2 29 plus the amount of value added to the total actual value by
  2 30 the revaluation of the property by the department of revenue
  2 31 as of January 1, 1979. For valuations established as of
  2 32 January 1, 1980, commercial property and industrial property,
  2 33 excluding properties referred to in section 427A.1, subsection
  2 34 8, shall be assessed at a percentage of the actual value of
  2 35 each class of property. The percentage shall be determined
  3  1 for each class of property by the director of revenue for the
  3  2 state in accordance with the provisions of this section. For
  3  3 valuations established as of January 1, 1980, the percentage
  3  4 shall be the quotient of the dividend and divisor as defined in
  3  5 this section. The dividend for each class of property shall
  3  6 be the dividend as determined for each class of property for
  3  7 valuations established as of January 1, 1979, adjusted by the
  3  8 product obtained by multiplying the percentage determined
  3  9 for that year by the amount of any additions or deletions to
  3 10 actual value, excluding those resulting from the revaluation
  3 11 of existing properties, as reported by the assessors on the
  3 12 abstracts of assessment for 1979, plus four percent of the
  3 13 amount so determined. The divisor for each class of property
  3 14 shall be the total actual value of all such property in 1979,
  3 15 as equalized by the director of revenue pursuant to section
  3 16 441.49, plus the amount of value added to the total actual
  3 17 value by the revaluation of existing properties in 1980. The
  3 18 director shall utilize information reported on the abstracts of
  3 19 assessment submitted pursuant to section 441.45 in determining
  3 20 such percentage. For valuations established as of January 1,
  3 21 1980, property valued by the department of revenue pursuant
  3 22 to chapters 428, 433, 437, and 438 shall be assessed at a
  3 23 percentage of its actual value. The percentage shall be
  3 24 determined by the director of revenue in accordance with the
  3 25 provisions of this section. For valuations established as of
  3 26 January 1, 1980, the percentage shall be the quotient of the
  3 27 dividend and divisor as defined in this section. The dividend
  3 28 shall be the total actual valuation established for 1979 by
  3 29 the department of revenue, plus eight percent of the amount so
  3 30 determined. The divisor for property valued by the department
  3 31 of revenue pursuant to chapters 428, 433, 437, and 438 shall
  3 32 be the valuation established for 1979, plus the amount of
  3 33 value added to the total actual value by the revaluation of
  3 34 the property by the department of revenue as of January 1,
  3 35 1980. For valuations established as of January 1, 1981,
  4  1 and each year thereafter, the percentage of actual value as
  4  2 equalized by the director of revenue as provided in section
  4  3 441.49 at which commercial property and industrial property,
  4  4 excluding properties referred to in section 427A.1, subsection
  4  5 8, shall be assessed shall be calculated in accordance with
  4  6 the methods provided herein, except that any references to
  4  7 six percent in this subsection shall be four percent. For
  4  8 valuations established as of January 1, 1981, and each year
  4  9 thereafter, the percentage of actual value at which property
  4 10 valued by the department of revenue pursuant to chapters 428,
  4 11 433, 437, and 438 shall be assessed shall be calculated in
  4 12 accordance with the methods provided herein, except that any
  4 13 references to ten percent in this subsection shall be eight
  4 14 percent.  For valuations established on or after January 1,
  4 15 2014, property valued by the department of revenue pursuant to
  4 16 chapter 433 shall be assessed at a percentage of its actual
  4 17 value. For valuations established for the assessment year
  4 18 beginning January 1, 2014, the percentage of actual value at
  4 19 which property valued by the department of revenue pursuant
  4 20 to chapter 433 shall be assessed shall be eighty percent.
  4 21 For valuations established for the assessment year beginning
  4 22 January 1, 2015, and each year thereafter, the percentage of
  4 23 actual value at which property valued by the department of
  4 24 revenue pursuant to chapter 433 shall be assessed shall be
  4 25 sixty percent. Beginning with valuations established as of
  4 26 January 1, 1979, and each year thereafter, property valued by
  4 27 the department of revenue pursuant to chapter 434 shall also be
  4 28 assessed at a percentage of its actual value which percentage
  4 29 shall be equal to the percentage determined by the director
  4 30 of revenue for commercial property, industrial property, or
  4 31 property valued by the department of revenue pursuant to
  4 32 chapters 428, 433, 437, and 438, whichever is lowest.
  4 33    Sec. 3.  Section 441.21, subsections 9 and 10, Code 2013, are
  4 34 amended to read as follows:
  4 35    9.  Not later than November 1, 1979, and November 1 of
  5  1 each subsequent year, the director shall certify to the
  5  2 county auditor of each county the percentages of actual
  5  3 value at which residential property, agricultural property,
  5  4 commercial property, industrial property, property valued by
  5  5 the department of revenue under chapter 433, and property
  5  6 valued by the department of revenue pursuant to chapters 428,
  5  7 433, 434, 437, and 438 in each assessing jurisdiction in the
  5  8 county shall be assessed for taxation. The county auditor
  5  9 shall proceed to determine the assessed values of agricultural
  5 10 property, residential property, commercial property, industrial
  5 11 property, property valued by the department of revenue under
  5 12 chapter 433, and property valued by the department of revenue
  5 13 pursuant to chapters 428, 433, 434, 437, and 438 by applying
  5 14 such percentages to the current actual value of such property,
  5 15 as reported to the county auditor by the assessor, and the
  5 16 assessed values so determined shall be the taxable values of
  5 17 such properties upon which the levy shall be made.
  5 18    10.  The percentage of actual value computed by the director
  5 19 for agricultural property, residential property, commercial
  5 20 property, industrial property, property valued by the
  5 21 department of revenue under chapter 433, and property valued by
  5 22 the department of revenue pursuant to chapters 428, 433, 434,
  5 23 437, and 438 and used to determine assessed values of those
  5 24 classes of property does not constitute a rule as defined in
  5 25 section 17A.2, subsection 11.
  5 26    Sec. 4.  Section 476.1D, subsection 10, Code 2013, is amended
  5 27 by striking the subsection.
  5 28    Sec. 5.  APPLICABILITY.  This Act applies to assessment years
  5 29 beginning on or after January 1, 2014.
  5 30                           EXPLANATION
  5 31    This bill relates to the manner in which the property of
  5 32 telecommunications companies is assessed and taxed.
  5 33    Current Code section 433.4 requires the director of
  5 34 revenue to value for property tax purposes all property of
  5 35 the telephone and telegraph companies used in the transaction
  6  1 of telegraph and telephone business in this state, including
  6  2 real, personal, or mixed property.  The bill provides that
  6  3 for assessment years beginning on or after January 1, 2014,
  6  4 only the real property of telegraph and telephone companies is
  6  5 subject to valuation and taxation and that such property shall
  6  6 be subject to assessment and taxation under Code chapter 433 by
  6  7 the director of revenue in the same manner as property assessed
  6  8 and taxed as commercial property.
  6  9    The bill strikes a provision in Code section 476.1D that
  6 10 allowed certain specified long=distance telephone company
  6 11 property to be assessed for taxation as commercial property by
  6 12 the local assessor.
  6 13    The bill also provides that for valuations established on
  6 14 or after January 1, 2014, property valued by the department of
  6 15 revenue pursuant to Code chapter 433 shall be assessed at a
  6 16 percentage of its actual value. For valuations established for
  6 17 the assessment year beginning January 1, 2014, the percentage
  6 18 of actual value at which property valued by the department of
  6 19 revenue pursuant to Code chapter 433 shall be assessed shall be
  6 20 80 percent. For valuations established for the assessment year
  6 21 beginning January 1, 2015, and subsequent assessment years,
  6 22 the percentage of actual value at which property valued by the
  6 23 department of revenue pursuant to Code chapter 433 shall be
  6 24 assessed shall be 60 percent.
  6 25    The bill applies to assessment years beginning on or after
  6 26 January 1, 2014.
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