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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,
Wheeler
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
Effective: 01/01/99
H0752|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fourth Legislature Second Regular Session - 1998IN 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- 20 poses. 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 43 stock. 2 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 allfranchises;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 44 cars. 45 (16) "Public utility" means electrical companies,telephone compa-46nies,pipeline companies, natural gas distribution companies, or power 47 producers included within federal law,telecommunications companies pro-48viding intercounty or interstate service or charging their users a separately49stated 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- 3 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- 6 pany. 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 32 spouse. 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 48 year. 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: 4 1 63-401. OPERATING PROPERTY ASSESSED BY STATE TAX COMMISSION. Operating 2 property, completed or under construction,and the franchises of persons3operating a public utility, railroad or private railcar fleetshall 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 telephone17companycorporation in the state and for each taxing 18 district in which such telephonecompanycorporation 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- 5 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,5DEPOSITS ANDINTANGIBLE PERSONAL PROPERTY. (1) The follow- 6 ing intangible personal property is exempt from taxation: capital 7 stock,and bonds .and other8intangible 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
RS07869C1
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.
FISCAL NOTE
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
1996.
CONTACT:
US West
Lynn
Cundick
Telephone:
385-2441
H 752