IN THE SUPREME COURT OF IOWA
No. 22–1190
Submitted April 11, 2023—Filed May 5, 2023
STORY COUNTY WIND, LLC,
Appellant,
vs.
STORY COUNTY BOARD OF REVIEW,
Appellee.
Appeal from the Iowa District Court for Story County, Amy M. Moore,
Judge.
A wind generation company appeals the district court’s dismissal of the
company’s property tax appeal. AFFIRMED.
May, J., delivered the opinion of the court, in which all justices joined.
Brant D. Kahler (argued) and Cynthia Boyle Lande of Brown, Winick,
Graves, Gross & Baskerville, P.L.C., Des Moines, for appellant.
Timothy C. Meals, County Attorney, and Ethan P. Anderson (argued) and
Joshua A. Duden (argued), Assistant County Attorneys, for appellee. 2
MAY, Justice.
Iowa Code section 427B.26 (2021) creates a special system for valuing
wind plants for property tax purposes. Story County Wind, LLC (SCW) contends
that “repowering” a wind plant—replacing a substantial proportion of its parts—
changes the valuation analysis under section 427B.26. The district court
rejected this view, as do we. We affirm.
I. Background.
Iowa Code section 427B.26 is entitled “Special valuation of wind energy
conversion property.” Here we consider the version of section 427B.26 that was
effective from July 1, 1993, to June 30, 2021.1 It states in part:
2. In lieu of the valuation and assessment provisions in [other Code sections], wind energy conversion property . . . shall be valued by the local assessor for property tax purposes as follows:
a. For the first assessment year, at zero percent of the net acquisition cost.
b. For the second through sixth assessment years, at a percent of the net acquisition cost which rate increases by five percentage points each assessment year.
c. For the seventh and succeeding assessment years, at thirty percent of the net acquisition cost.
....
4. For purposes of this section:
a. “Net acquisition cost” means the acquired cost of the property including all foundations and installation cost less any excess cost adjustment.
1Section 427B.26 was amended by the 2021 legislature, 2021 Iowa Acts ch. 80, §§ 269– 270 (codified at Iowa Code § 427B.26 (2022)), and again by the 2022 legislature, 2022 Iowa Acts ch. 1075, §§ 1–3 (to be codified at Iowa Code § 427B.26 (2023)). We discuss the 2022 amendments at the end of this opinion. 3
b. “Wind energy conversion property” means the entire wind plant including, but not limited to, a wind charger, windmill, wind turbine, tower and electrical equipment, pad mount transformers, power lines, and substation.
Id.2
SCW owns and operates the “wind energy conversion property”—or wind
plants3—at issue here. The plants were first placed in service in 2008. They were
first assessed for property tax purposes in 2009. And so, 2009 was the plants’
“first assessment year” under the statute’s graduated valuation schedule. Id.
§ 427B.26(2)(a). During that year, the plants were valued at “zero percent of the
net acquisition cost.” Id. After that, their valuations gradually increased until
2015, the plants’ “seventh . . . assessment year[].” Id. § 427B.26(2)(c). Since then,
the plants have been valued “at thirty percent of the net acquisition cost.” Id.
In 2019, a “repowering” project began for the wind plants. This project was
aimed at replacing “old and obsolete blade and generator technology with new
blade and generator technology.” It included the replacement of gearboxes,
blades, hubs, pitch systems, bearing and main shafts, and oil coolers. But the
2In the interest of brevity, we have not reproduced subsections (1) and (3) of Iowa Code
section 427B.26. Subsection (1) concerns the methods by which cities and counties may opt in— and later opt out—of section 427B.26’s special valuation system. Id. § 427B.26(1). Subsection (3) concerns the method for taxpayers to opt in to section 427B.26’s special valuation system “in lieu of” taxation under other provisions. Id. § 427B.26(3). 3The record is not wholly clear about how we should describe SCW’s property. SCW refers to its property as “wind tower parcels,” but “parcels” are not mentioned in the statute. However, SCW also says that its “wind tower parcels” are correctly classified as “wind energy conversion property” under the statute. And the statute defines “wind energy conversion property” to mean “wind plant[s].” Id. § 427B.26(4)(b). So we use the term “wind plant.” 4
project did not add any additional wind towers. And the project did “not involve
changes to the transmission line, access roads, [or] tower foundations.”4
Notwithstanding the repowering project, the Story County Assessor
continued to value and assess the wind plants as before. In 2021, SCW filed a
protest with the Story County Board of Review (Board). Specifically, SCW asked
for the assessment to “be adjusted by (1) removing the original acquisition cost
of [components replaced during the repowering] from the calculation; (2) adding
the original acquisition cost of new components [added during the repowering]
to the calculation; and (3) restarting the phased-in assessment percentages
described in Iowa Code § 427B.26 for the new components.”
The Board declined to modify the assessment. SCW then appealed to the
district court. SCW and the Board filed cross-motions for summary judgment.
The court denied SCW’s motion and granted the Board’s motion. SCW appeals.
II. Standard of Review.
Usually, “appeals from decisions of the local board of review are triable in
equity, Iowa Code § 441.39, and our review is de novo, Iowa R. App. P. 6.907.”
Dolphin Residential Coop., Inc. v. Iowa City Bd. of Rev., 863 N.W.2d 644, 647
(Iowa 2015). But “because the district court adjudicated the issue on appeal by
summary judgment, our review is for corrections of errors at law.” Id. The district
court should grant summary judgment if “there is no genuine issue as to any
material fact and . . . the moving party is entitled to a judgment as a matter of
4The record gives conflicting signals about whether towers were replaced. There was also
disagreement on this issue at oral argument. Because the matter comes to us following a grant of summary judgment against SCW, we accept SCW’s position that towers were replaced. 5
law.” Iowa R. Civ. P. 1.981(3). “In considering a motion for summary judgment
that requires an interpretation of a statute, our review is for correction of legal
error.” Dolphin Residential, 863 N.W.2d at 647.
III. Analysis.
Generally speaking, property taxes are based on the “market value” of the
assessed property. Iowa Code § 441.21(1)(b)(1). As noted, though, Iowa Code
section 427B.26 creates a special system for valuing wind plants. Under this
system, a wind plant’s valuation depends upon its “net acquisition cost” and its
tax age, that is, the number of years that the plant has been assessed. Id.
§ 427B.26(2). “For the first assessment year,” a plant is valued “at zero percent
of the net acquisition cost.” Id. § 427B.26(2)(a). Its valuation then increases “by
five percentage points each assessment year.” Id. § 427B.26(2)(b). Ultimately, the
plant’s valuation caps out at “thirty percent of the net acquisition cost” for the
“seventh and succeeding assessment years.” Id. § 427B.26(2)(c).
Here we consider whether this scheme is altered by a “repowering,” that
is, a replacement of a substantial portion of a wind plant’s parts. Is it true, as
SCW suggests, that replaced parts should be placed on their own valuation
schedule? And should that new schedule include a separate “first assessment
year” for those replaced parts? Id. § 427B.26(2)(a). And should those replaced
parts be valued at “zero percent” during their (separate) “first assessment year”—
even if (as here) the wind plant as a whole is past its “seventh . . . assessment
year” and, therefore, is valued at “thirty percent of the net acquisition cost”? Id.
§ 427B.26(2). 6
To answer these questions, we must study the text of the statute, “the
words used by the legislature.” Carolan v. Hill, 553 N.W.2d 882, 887 (Iowa 1996).
We must determine “the fair and ordinary meaning” of those words. Com. Bank
v. McGowen, 956 N.W.2d 128, 133 (Iowa 2021). We must consider the statute as
a whole, “not just isolated words and phrases.” In re J.C., 857 N.W.2d 495, 500
(Iowa 2014).
We have reviewed section 427B.26 as a whole. And we have found nothing
that supports SCW’s proposed separate-schedules-for-replacement-parts
regime. The statute does not mention “repowerings” or any other part
replacements. It does not contain the word “replacement” or any synonyms. And
yet the word “replacement” appears in many other Iowa statutes. E.g., Iowa Code
§ 6A.21(2); id. § 7E.5A(1); id. §§ 8A.311(16)(c), .365(1); id. § 8C.7A(1), (3); id.
§ 8D.13(8); id. §§ 15.293A(2)(d)–(f), .355(3)(e); id. § 15E.52(12); id. § 16.194(1),
(4), (9). The phrase “replacement parts” appears in several statutes. E.g. Iowa
Code § 8A.362(8); id. § 322F.1(7)(m); id. § 423D.1(1)(d); id. § 537B.4(2); id.
§ 555A.1(3)(a)(5). And the Iowa Code contains many related terms, like
“maintenance,” id. § 26.2(3)(b), (4), “modernization,” id. § 135.61(17),
“reconstruction,” id. § 16.194A(1), “renovation,” id. § 16.196(1)(b), “repair,” id.
§ 26.2(3)(b), (4), “repair or replacement,” id. § 89.7A(3), “replacement . . .
equipment,” id. § 8A.345, “replacement or modification of any existing
equipment,” id. § 103A.8(7), “replacement of existing structures,” id. § 8C.7C(3),
“replacement of . . . component parts,” id. § 100D.1(7), and “replacement of . . .
worn . . . parts,” id. § 89A.1(1). If the legislature had intended for part 7
replacement projects to trigger special treatment under section 427B.26, we
think that terms like these would appear in section 427B.26. But they don’t.5
Instead, section 427B.26 provides just one special schedule. That
schedule ties the valuation of “wind energy conversion property” to its tax age—
its “assessment year”—and its “net acquisition cost.” Id. § 427B.26(2). And
section 427B.26 specifically defines “wind energy conversion property” to mean
“the entire wind plant.” Id. § 427B.26(4)(b) (emphasis added). The whole thing.
Like the Board, we read this to mean that valuation under section 427B.26
depends on the tax age and acquisition cost of an “entire wind plant”—the plant
as a whole. It does not depend on the cost or age of replacement parts.
Here, it is undisputed that SCW’s repowering project did not add or replace
an “entire wind plant.” Id. (emphasis added). No additional towers were added.
And important portions of the existing plants—including their foundations—
were not replaced. As a result, the repowering project did not impact the plants’
valuation under section 427B.26.
We have considered all of SCW’s counterarguments. To its credit, SCW
concedes that the statute “does not expressly address repowers.” But SCW
contends that the statutory term “net acquisition cost” “encompasses repowers
and their ‘acquired cost,’ ” i.e., the cost of replacing components through a
repowering. (Emphasis added.) We disagree. Section 427B.26 defines “net
5By way of conscious repetition, this opinion is focused on a specific version of section 427B.26 that was in effect from July 1, 1993 to June 30, 2021. As we discuss at the end of this opinion, the 2022 amendments to section 427B.26 added specific references to “repowering” and related concepts. 8
acquisition cost” as the “acquired cost of the property including all foundations
and installation cost less any excess cost adjustment.” Id. § 427B.26(4)(a)
(emphasis added). And the only “property” mentioned in section 427B.26 is the
“[w]ind energy conversion property,” which the statute defines to mean “the
entire wind plant.” Id. § 427B.26(4)(b). We think this means that “net acquisition
cost” is the “acquired cost” of “the entire wind plant,” including the cost of “all
foundations and installation.” Id. § 427B.26(4). In other words, “net acquisition
cost” refers to the original cost of constructing the wind plant and bringing it
online. See Cost, Acquisition Cost, Black’s Law Dictionary 436 (11th ed. 2019)
(“An asset’s net price; the original cost of an asset.”). It is the plant’s historical
cost. See id. (noting “acquisition cost” is “[a]lso termed historical cost” (emphasis
omitted)). And it remains the same from the wind plant’s “first assessment
year”—when the plant is valued at “zero percent” of its “net acquisition cost”—
through the wind plant’s “seventh and succeeding assessment years,” when the
plant is valued at “thirty percent of the net acquisition cost.” Iowa Code
§ 427B.26(2). It does not change because of repowerings. And it does not change
because of any other part replacements. We emphasize again that words like
“repowering” and “replacement” are absent from the statutory text, as are
“maintenance,” “modernization,” “reconstruction,” and “renovation.”
SCW also suggests that because the statute is ambiguous, we should look
beyond its text. As we recently emphasized, though, “a statute is not ambiguous
merely because two litigants disagree about its meaning.” Est. of Butterfield v.
Chautauqua Guest Home, Inc., 987 N.W.2d 834, ___ (Iowa 2023). “Declaring 9
ambiguity whenever skilled lawyers offer divergent meanings for phrases would
unnecessarily launch us into ambiguity-resolving canons in most of our cases.”
Id. at ___ (quoting Carreras v. Iowa Dep’t of Transp., Motor Vehicle Div., 977
N.W.2d 438, 456 (Iowa 2022) (McDermott, J., concurring in part and dissenting
in part)). Rather, we declare a statute ambiguous if its text supports multiple
reasonable interpretations. See State v. Iowa Dist. Ct., 889 N.W.2d 467, 471–72
(Iowa 2017). To make this determination, we consider both particular words and
their context: the statute as a whole. See id.
As explained, though, our review of section 427B.26 as a whole has
revealed no substantial support for SCW’s view that repowering projects trigger
different valuations under different schedules. As to this issue, the statutory text
does not support multiple reasonable readings. As to this issue, the statute is
not ambiguous.
But SCW suggests that “[s]ilence on a particular issue constitutes
statutory ambiguity” and, therefore, the statute’s failure to mention
“repowerings” means that the statute is ambiguous about repowerings and,
therefore, we can use ambiguity-resolving principles to conclude that
repowerings trigger special tax treatment. We disagree. A statute’s silence about
a topic doesn’t necessarily create ambiguity about the statute’s treatment of that
topic. Rather, a statute’s silence on a topic often means that the unmentioned
topic is simply not covered by the statute. See Antonin Scalia & Bryan A. Garner,
Reading Law: The Interpretation of Legal Texts 93 (2012) [hereinafter Scalia &
Garner] (“The principle that a matter not covered is not covered is so obvious 10
that it seems absurd to recite it.”). For example, section 427B.26 does not
address the length of windmill blades. This doesn’t mean that section 427B.26
is ambiguous about windmill blade length. It doesn’t mean that there are
competing reasonable interpretations about the tax implications of windmill
blade length. It doesn’t mean that—if we were to apply ambiguity-resolving
canons—we could then attach particular tax consequences to various windmill
blade lengths. Rather, section 427B.26’s silence about windmill blade length just
means that section 427B.26 has nothing to do with windmill blade length.
Similarly, we think that section 427B.26’s silence about repowerings—or any
other kind of part replacement—just means that part replacements are not
relevant under section 427B.26. They do not affect its valuation scheme.
All things considered, then, we conclude section 427B.26 is not
ambiguous for purposes of this case. As a result, we need not resort to
ambiguity-resolving tools. For instance, we need not consider the principle that
“[s]tatutes which impose taxes are construed liberally in favor of the taxpayer
and strictly against the taxing body,” Iowa Auto Dealers Ass’n v. Iowa Dep’t of
Revenue, 301 N.W.2d 760, 762 (Iowa 1981), or the potentially conflicting
principle that “[t]ax exemption statutes are construed strictly, with all doubts
resolved in favor of taxation,” Dial Corp. v. Iowa Dep’t of Revenue & Fin., 634
N.W.2d 643, 646 (Iowa 2001) (quoting Heartland Lysine, Inc. v. State of Iowa,
Dep’t of Revenue & Fin., 503 N.W.2d 587, 588 (Iowa 1993)). See Scalia & Garner,
at 362 (“Like any other governmental intrusion on property or personal freedom, 11
a tax statute should be given its fair meaning, and this includes a fair
interpretation of any exceptions it contains.”).
We also note that although some tax statutes grant a measure of
interpretive authority to the director of revenue, section 427B.26 does not.
Compare Iowa Code § 421.17(18) (granting the director of revenue power to
“issue rules as are necessary, subject to the provisions of chapter 17A, to provide
for the uniform application of the exemptions provided in section 427.1 in all
assessor jurisdictions in the state”), and id. § 427A.1(10) (directing “[t]he director
of revenue [to] promulgate rules subject to chapter 17A to carry out the intent of
this section” (emphasis added)), with id. § 427B.26 (containing no such
authorization). See generally Renda v. Iowa C.R. Comm’n, 784 N.W.2d 8, 10–16
(Iowa 2010) (discussing principles for determining whether and to what extent
the legislature has vested interpretive authority in an agency). Also, because
section 427B.26 is unambiguous, we need not rely on administrative
interpretations to resolve ambiguities. See Mathis v. Iowa Utils. Bd., 934 N.W.2d
423, 430 (Iowa 2019) (“[L]ongstanding administrative interpretations are entitled
to some weight in statutory construction.” (quoting Iowa Ins. Inst. v. Core Grp. of
the Iowa Ass’n for Just., 867 N.W.2d 58, 77 (Iowa 2015))). Even so, we note that
some Iowa Department of Revenue guidance is contained in our record, and we
have reviewed it. It does not cause us to doubt our reading of the statutory text.
A final note: As we emphasized earlier, this case is about the version of
section 427B.26 that was effective from July 1, 1993 to June 30, 2021. To avoid
confusion, we mention that the 2022 legislature made relevant amendments to 12
section 427B.26. 2022 Iowa Acts ch. 1075, §§ 1–3 (to be codified at Iowa Code
§ 427B.26 (2023)). Because of these amendments, section 427B.26 now
expressly provides that “[m]aintaining, refurbishing, or repowering wind energy
conversion property shall not cause the wind energy conversion property to
receive a new assessment schedule.” Iowa Code § 427B.26(3)(b) (2023). And the
amended statute now expressly defines “[r]epowering” to mean “the removal and
replacement of components of wind energy conversion property.” Id.
§ 427B.26(4)(c).
These amendments do not alter the outcome in this case. The parties’
briefs do not suggest that they should. Moreover, although some statutory
amendments change a statute’s meaning, others merely clarify. See, e.g., State
v. Guzman-Juarez, 591 N.W.2d 1, 3 (Iowa 1999). We think that these
amendments fall in the second category. We suspect that they were a response
to recent department of revenue guidance that (as SCW emphasizes) has
suggested that some repowerings could require new valuations on new
schedules.6 The 2022 amendments expressly reject that notion. They explicitly
confirm what was already implied by the statute’s preamendment text:
repowerings don’t change the valuation of wind plants. 2022 Iowa Acts ch. 1075,
§§ 1–3 (to be codified at Iowa Code § 427B.26(3)(b), (4)(c) (2023)).
6See Memorandum from the Iowa Dep’t of Revenue to Iowa Assessors (July 24, 2020),
https://tax.iowa.gov/sites/default/files/2020-07/Wind%20Energy%20Special%20Valuation .Final_.pdf. 13
IV. Conclusion.
Under Iowa Code section 427B.26 (2021), “repowering” a wind plant by
replacing component parts does not change the plant’s valuation for property tax
purposes. The district court was correct. We affirm.
AFFIRMED.