Print Friendly HOUSE BILL NO. 752, As Amended – Utilities, operating property, tax
HOUSE BILL NO. 752, As Amended
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H0752aaH............................................by REVENUE AND TAXATION
UTILITIES - OPERATING PROPERTY - Amends existing law relating to evaluation
and assessment of public utility property to exclude franchises and
rights-of-way from the definition of operating property, to specify
additional intangible personal properties which are exempt from taxation
and to authorize the State Tax Commission to promulgate rules to exclude
intangible personal property from the taxable value of operating property.
02/19 House intro - 1st rdg - to printing
02/20 Rpt prt - to Rev/Tax
03/10 Rpt out - to Gen Ord
03/10 Rpt out amen - to engros
Rpt engros - 1st rdg - to 2nd rdg as amen
03/11 2nd rdg - to 3rd rdg as amen
03/11 Rls susp - PASSED - 47-12-11
AYES -- Barraclough, Barrett, Bell, Bivens, Black(15), Bruneel,
Callister, Campbell, Clark, Crane, Deal, Denney, Ellsworth,
Field(13), Field(20), Gagner, Gould, Hadley, Hansen, Hornbeck,
Jaquet, Jones(9), Jones(22), Jones(20), Judd, Kellogg, Kendell,
Kjellander, Lake, Loertscher, McKague, Meyer, Miller, Mortensen,
Newcomb, Reynolds, Richman, Schaefer, Stevenson, Stone, Taylor,
Tilman, Tippets, Trail, Wheeler, Zimmermann, Mr Speaker
NAYS -- Bieter, Black(23), Boe, Chase, Henbest, Kunz, Marley,
Pomeroy, Ridinger, Robison, Stoicheff, Watson
Absent and excused -- Alltus, Crow, Cuddy, Geddes, Kempton, Linford,
Mader, Pischner, Sali, Stubbs, Wood
Floor Sponsor - Jones(9)
Title apvd - to Senate
03/12 Senate intro - 1st rdg as amen - to Loc Gov
03/19 Rpt out - rec d/p - to 2nd rdg as amen
03/20 2nd rdg - to 3rd rdg as amen
03/20 3rd rdg as amen - PASSED - 31-3-1
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Darrington, Frasure, Geddes, Hansen, Hawkins, Ingram, Ipsen,
Keough, King, Lee, McLaughlin, Noh, Parry, Richardson, Riggs, Risch,
Sandy, Schroeder, Sorensen, Stennett, Sweeney, Thorne, Twiggs,
NAYS--Deide, Dunklin, Whitworth
Absent and excused--Danielson
Floor Sponsor - Thorne
Title apvd - to House
03/23 To enrol - rpt enrol - Sp signed
03/24 Pres signed - to Governor
03/25 Governor signed
Session Law Chapter 400
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fourth Legislature Second Regular Session - 1998
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 752, As Amended
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO VALUATION AND ASSESSMENT OF PUBLIC UTILITY PROPERTY FOR TAX PUR-
3 POSES; AMENDING SECTION 63-201, IDAHO CODE, TO REVISE THE DEFINITION OF
4 "OPERATING PROPERTY", TO REVISE THE DEFINITION OF "PUBLIC UTILITY" AND TO
5 MAKE A TECHNICAL CORRECTION; AMENDING SECTION 63-401, IDAHO CODE, TO CLAR-
6 IFY THAT OPERATING PROPERTY SHALL BE ASSESSED BY THE STATE TAX COMMISSION
7 AND DOES NOT INCLUDE CERTAIN FRANCHISES; AMENDING SECTION 63-405, IDAHO
8 CODE, TO PROVIDE PROPER TERMINOLOGY; AMENDING SECTION 63-602L, IDAHO CODE,
9 TO SPECIFY WHICH INTANGIBLE PERSONAL PROPERTIES ARE EXEMPT FROM TAXATION
10 AND TO AUTHORIZE THE STATE TAX COMMISSION TO PROMULGATE RULES TO EXCLUDE
11 INTANGIBLE PERSONAL PROPERTY FROM THE TAXABLE VALUE OF OPERATING PROPERTY;
12 AND PROVIDING AN EFFECTIVE DATE.
13 Be It Enacted by the Legislature of the State of Idaho:
14 SECTION 1. That Section 63-201, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 63-201. DEFINITIONS. As used for property tax purposes in title 63, chap-
17 ters 1 through 23, Idaho Code, the terms defined in this section shall have
18 the following meanings, unless the context clearly indicates another meaning:
19 (1) "Appraisal" means an estimate of property value for property tax pur-
21 (a) For the purpose of estimated property value to place the value on any
22 assessment roll, the value estimation must be made by the assessor or a
23 certified property tax appraiser.
24 (b) For the purpose of estimating property value to present for an appeal
25 filed pursuant to sections 63-501A, 63-407 and 63-409, Idaho Code, the
26 value estimation may be made by the assessor, a certified property tax
27 appraiser, a licensed appraiser, or a certified appraiser or any party as
28 specified by law.
29 (2) "Bargeline" means those water transportation tugs, boats, barges,
30 lighters and other equipment and property used in conjunction with waterways
31 for bulk transportation of freight or ship assist.
32 (3) "Cogenerators" means facilities which produce electric energy, and
33 steam or forms of useful energy which are used for industrial, commercial,
34 heating or cooling purposes.
35 (4) "Collection costs" are amounts authorized by law to be added after
36 the date of delinquency and collected in the same manner as property tax.
37 (5) "Delinquency" means any property tax, special assessment, fee, col-
38 lection cost, or charge collected in the same manner as property tax, that has
39 not been paid in the manner and within the time limits provided by law.
40 (6) "Improvements" means all buildings, structures, fixtures and fences
41 erected upon or affixed to the land, and all fruit, nut-bearing and ornamental
42 trees or vines not of natural growth, growing upon the land, except nursery
1 (7) "Late charge" means a charge of two percent (2%) of the delinquency.
2 (8) "Lawful money of the United States" means currency and coin of the
3 United States at par value and checks and drafts which are payable in dollars
4 of the United States at par value, payable upon demand or presentment.
5 (9) "Manufactured home" means a structure defined as a manufactured home
6 in section 39-4105, Idaho Code.
7 (10) "Market value" means the amount of United States dollars or equiva-
8 lent for which, in all probability, a property would exchange hands between a
9 willing seller, under no compulsion to sell, and an informed, capable buyer,
10 with a reasonable time allowed to consummate the sale, substantiated by a rea-
11 sonable down or full cash payment.
12 (11) "Operating property" means all franchises; rights-of-way
13 accompanied by title ; roadbed s ; tracks; pipelines;
14 bargelines; equipment and docks; terminals; rolling stock; equipment; power
15 stations; power sites; lands; reservoirs, generating plants, transmission
16 lines, distribution lines and substations; and all immovable or movable prop-
17 erty operated in connection with any public utility, railroad or private
18 railcar fleet, wholly or partly within this state, and necessary to the main-
19 tenance and operation of such road or line, or in conducting its business, and
20 shall include all title and interest in such property, as owner, lessee or
21 otherwise. The term does not include personal property exempt from taxa-
22 tion pursuant to section 63-602L, Idaho Code.
23 (12) "Party in interest" means a person who holds a properly recorded
24 mortgage, deed of trust or security interest.
25 (13) "Person" means any entity, individual, corporation, partnership,
26 firm, association, limited liability company, limited liability partnership
27 or other such entities as recognized by the state of Idaho.
28 (14) "Personal property" includes all goods, chattels, stocks and bonds,
29 equities in state lands, easements, reservations, leasehold real properties
30 and all other property which the law defines, or the courts may interpret,
31 declare and hold to be personal property under the letter, spirit, intent and
32 meaning of the law, for the purposes of property taxation. For the purposes of
33 payment and collection of property taxes pursuant to chapter 9, title 63,
34 Idaho Code, collection of delinquency pursuant to chapter 10, title 63, Idaho
35 Code, and seizure and sale of personal property for taxes pursuant to chapter
36 11, title 63, Idaho Code, personal property includes manufactured homes not
37 declared as real property pursuant to section 63-304, Idaho Code.
38 (15) "Private railcar fleet" means railroad cars or locomotives owned by,
39 leased to, occupied by or franchised to any person other than a railroad com-
40 pany operating a line of railroad in Idaho or any company classified as a
41 railroad by the interstate commerce commission and entitled to possess such
42 railroad cars and locomotives except those possessed solely for the purpose of
43 repair, rehabilitation or remanufacturing of such locomotives or railroad
45 (16) "Public utility" means electrical companies, telephone compa-
46 nies, pipeline companies, natural gas distribution companies, or power
47 producers included within federal law, telecommunications companies pro-
48 viding intercounty or interstate service or charging their users a separately
49 stated fee for the use of its services, bargelines, and water companies
50 which are under the jurisdiction of the Idaho public utilities commission.
51 The term also includes telephone corporations, as that term is defined
52 in section 62-603, Idaho Code, except as hereinafter provided, whether or not
53 such telephone corporation has been issued a certificate of convenience and
54 necessity by the Idaho public utilities commission.
55 This term does not include cogenerators, mobile telephone service or com-
1 panies, nor does it include pager service or companies, except when such ser-
2 vices are an integral part of services provided by a certificated utility com-
3 pany nor does the term "public utility" include companies or persons engaged
4 in the business of providing solely on a resale basis, any telephone or tele-
5 communication service which is purchased from a telephone corporation or com-
7 (17) "Railroad" means every kind of railway, whether its line of rails or
8 tracks be at, above or below the surface of the earth, and without regard to
9 the kind of power used in moving its rolling stock, and shall be considered
10 to include every kind of street railway, suburban railway or interurban rail-
11 way excepting facilities established solely for maintenance and rebuilding of
12 railroad cars or locomotives.
13 (18) "Real property" means land, and all standing timber thereon, includ-
14 ing standing timber owned separately from the ownership of the land upon
15 which the same may stand, except as modified in chapter 17, title 63, Idaho
16 Code, and all buildings, structures and improvements, or other fixtures of
17 whatsoever kind on land, including water ditches constructed for mining, manu-
18 facturing or irrigation purposes, water and gas mains, wagon and turnpike toll
19 roads, and toll bridges, and all rights and privileges thereto belonging, or
20 any way appertaining, all quarries and fossils in and under the land, and all
21 other property which the law defines, or the courts may interpret, declare and
22 hold to be real property under the letter, spirit, intent and meaning of the
23 law, for the purposes of property taxation. Manufactured homes constitute real
24 property when located on taxable land, and after a statement of intent to
25 declare as real property has been recorded, provided said statement has not
26 been revoked. Timber, forest, forest land, and forest products shall be
27 defined as provided in chapter 17, title 63, Idaho Code.
28 (19) "Record owner" means the person or persons in whose name or names the
29 property stands upon the records of the county recorder's office. Where the
30 record owners are husband and wife at the time of notice of pending issue of
31 tax deed, notice to one (1) shall be deemed and imputed as notice to the other
33 (20) "Special assessment" means a charge imposed upon property for a spe-
34 cific purpose, collected and enforced in the same manner as property taxes.
35 (21) "System value" means the market value for assessment purposes of the
36 operating property when considered as a unit.
37 (22) "Tax code area" means a geographical area made up of one (1) or more
38 taxing districts with one (1) total levy within the geographic area, except as
39 otherwise provided by law.
40 (23) "Taxing district" means any entity or unit with the statutory author-
41 ity to levy a property tax.
42 (24) "Taxable value" means market value for assessment purposes, less
43 applicable exemptions or other statutory provisions.
44 (25) "Transient personal property" is personal property, specifically such
45 construction, logging or mining machinery and equipment which is kept, moved,
46 transported, shipped, hauled into or remaining for periods of not less than
47 thirty (30) days, in more than one (1) county in the state during the same
49 (26) "Warrant of distraint" means a warrant ordering the seizure of per-
50 sonal property to enforce payment of property tax, special assessment,
51 expense, fee, collection cost or charge collected in the same manner as per-
52 sonal property tax.
53 SECTION 2. That Section 63-401, Idaho Code, be, and the same is hereby
54 amended to read as follows:
1 63-401. OPERATING PROPERTY ASSESSED BY STATE TAX COMMISSION. Operating
2 property, completed or under construction, and the franchises of persons
3 operating a public utility, railroad or private railcar fleet shall be
4 assessed by the state tax commission.
5 SECTION 3. That Section 63-405, Idaho Code, be, and the same is hereby
6 amended to read as follows:
7 63-405. ASSESSMENT OF OPERATING PROPERTY. (1) The state tax commission
8 must assess all operating property at a meeting of the commission convening on
9 the second Monday of August in each year, and must complete the assessment of
10 such property on the fourth Monday in August.
11 (2) The state tax commission shall determine the system value and calcu-
12 late the allocation and apportionment of the system value for all operating
13 property and specifically determine:
14 (a) The number of miles and the value per mile of each railroad in the
15 state and for each taxing district in which such railroad may exist.
16 (b) The number of miles and the value per mile of each telephone
17 company corporation in the state and for each taxing
18 district in which such telephone company corporation
19 may exist.
20 (c) The number of miles and the value per mile of each pipeline in the
21 state and for each taxing district in which such pipeline may exist.
22 (d) The number of miles and the value per mile of each water company
23 under the jurisdiction of the public utilities commission in the state,
24 and for each taxing district in which such water company may exist. The
25 value per mile of any line included in this subsection, except railroads,
26 shall be determined by dividing the total value of such line within the
27 state by the number of miles of such line within the state. The value per
28 mile of railroad line shall be determined by apportionment of the total
29 value of line within the state. The apportionment shall be based twenty
30 percent (20%) on the ratio of line miles in the state to line miles in the
31 county; forty percent (40%) on the ratio of net ton miles in the state to
32 net ton miles in the county; and forty percent (40%) on the ratio of sta-
33 tion revenues in the state to station revenues in the county. All operat-
34 ing property of railroads shall be apportioned to the counties as part of
35 the railroad line in the county. The apportionment for taxing districts
36 shall be the same as the apportionment among counties.
37 (e) The system value, the number of miles and the value per mile of each
38 electric current transmission line and each electric current distribution
39 line in each county separately, and for each taxing district within said
40 county in which such transmission and distribution lines may exist. The
41 value per mile of any line included in this subsection shall be determined
42 by dividing the apportioned value of such line within each county by the
43 number of miles of such line within said county.
44 (f) The system value of private railcar fleets entering or standing in
45 Idaho in the year preceding the constituted lien as provided in section
46 63-411(3), Idaho Code.
47 (g) The system value and calculate the allocation and apportionment of
48 the system value for all other operating property.
49 (3) If the value of property of any company assessable under this section
50 is of such a nature that it cannot reasonably be apportioned on the basis of
51 rail, wire, pipeline mileage, such as microwave and radio relay stations, the
52 tax commission may adopt such other method or basis of apportionment to the
53 county and taxing districts in which the property is situate as may be feasi-
1 ble and proper.
2 SECTION 4. That Section 63-602L, Idaho Code, be, and the same is hereby
3 amended to read as follows:
4 63-602L. PROPERTY EXEMPT FROM TAXATION -- CAPITAL STOCK, BONDS,
5 DEPOSITS AND INTANGIBLE PERSONAL PROPERTY. (1) The follow-
6 ing intangible personal property is exempt from taxation: capital
7 stock , and bonds . and other
8 intangible personal property. The deposits in national banks, state
9 banks, and savings and loan associations. Shares and accounts of savings and
10 loan associations, credit unions or associations organized under the laws of
11 the state of Idaho for the purpose of accumulating the savings and funds of
12 their members and lending the same to their members. Goodwill, customer
13 lists, contracts and contract rights, patents, trademarks, custom computer
14 programs as defined in section 63-3616, Idaho Code, copyrights, trade secrets,
15 franchises, licenses, rights-of-way which are possessory only and not accompa-
16 nied by title.
17 (2) The commission shall promulgate rules which shall provide for the
18 exclusion of exempt intangible personal property from taxable value of operat-
19 ing property. Such rules shall allow each taxpayer the right to elect one (1)
20 of the following three (3) methods for exclusion of exempt intangible personal
21 property from its taxable value:
22 (a) Separate exclusion of the exempt intangible personal property at the
23 system level value; or
24 (b) Separate exclusion of the exempt intangible personal property at the
25 state allocated value; or
26 (c) Exclusion of the exempt intangible personal property by valuation of
27 only tangible personal property and nonexempt intangible personal property
28 using valuation models which do not impound or include values of the
29 exempt intangible personal property.
30 SECTION 5. This act shall be in full force and effect on and after Janu-
31 ary 1, 1999.
STATEMENT OF PURPOSE
The purpose of the proposed legislation is to clarify
existing law with reference to the taxation of intangible
personal property held by a public utility or railroad.
Intangible personal property held by a business or individual
is clearly exempt from property taxation pursuant to section
63-602L, Idaho Code. However, intangible personal property
held by a public utility or railroad has been included as
part of the "operating property" of public utilities and
railroads, which are centrally assessed for property tax
purposes by the State Tax Commission.
This proposal clarifies the definition of intangible
personal property, treats all entities owning intangible
personal property in a non-discriminatory manner, and
provides tax equity among property taxpayers.
The proposal also provides for all telephone companies,
with the exception of those providing mobile telephone
services, paging services, or resale services, to be included
within the definition of a "public utility" without regard to
the holding of a certificate of convenience and necessity
from the Public Utilities Commission.
There is no fiscal impact upon state revenues. Property
tax on operating property constitutes approximately 6.4% of
the total statewide property taxes. Based on a study of
intangible personal property held by eleven of the largest
utilities and railroads in Idaho, property tax on the
intangible personal property constitutes less than one-third
of one percent (.0031) of total property taxes collected in