§ 437A.15 — Allocation of revenue

Iowa § 437A.15

• Jurisdiction: Iowa
• Title X: FINANCIAL RESOURCES
• Ch. 437A: TAXES ON ELECTRICITY AND NATURAL GAS PROVIDERS

Text

1. The director and the department of management shall compute the allocation of all
replacement tax revenues other than transfer replacement tax revenues among the local
taxing districts in accordance with this section and shall report such allocation by local
taxing districts to the county treasurers on or before August 15 following a tax year.
2. The director shall determine and report to the department of management the total
replacement taxes to be collected from each taxpayer for the tax year on or before July 30
following such tax year.
3. a. (1) All replacement taxes owed by a taxpayer shall be allocated among the local
taxing districts in which such taxpayer’s property is located in accordance with a general
allocation formula determined by the department of management on the basis of general
property tax equivalents. General property tax equivalents shall be determined by applying
the levy rates reported by each local taxing district to the department of management on or
before June 30 following a tax year to the taxable value of taxpayer property allocated to each
such local taxing district as adjusted and reported to the department of management in such
tax year by the director pursuant to section 437A.19, subsection 2. The general allocation
formulaforataxyearshallallocatetoeachlocaltaxingdistrictthatportionofthereplacement
taxes owed by each taxpayer which bears the same ratio as such taxpayer’s general property
tax equivalents for each local taxing district bears to such taxpayer’s total general property
tax equivalents for all local taxing districts in Iowa.
(2) Whenallocatingnaturalgasdeliverytaxesondeliveriesofnaturalgastoanewelectric
power generating plant, ten percent of those natural gas delivery taxes shall be allocated
over new gas property built to directly serve the new electric power generating plant and
ninety percent of those natural gas delivery taxes shall be allocated to the general property
tax equivalents of all gas property within the natural gas competitive service area or areas
where the new gas property is located.
b. Notwithstanding other provisions of this section, if excess property tax liability has
beenassignedpursuanttosection437A.4, subsection3, paragraph“c”, subparagraph(4), and
has not been removed, the allocation of electric delivery replacement tax attributable to the
excesspropertytaxliabilityshallbemadebythedirectorandthedepartmentofmanagement
so as to allocate the electric delivery replacement tax attributable to the excess property tax
liability among those local taxing districts in which the property associated with the excess
property tax liability is located. In order to ensure that the electric delivery replacement tax
attributable to the excess property tax liability is paid to the appropriate county treasurer
for disposition to the local taxing districts, each distribution electric cooperative member
and each municipal utility purchasing member subject to section 437A.4, subsection 3,
paragraph “c”, subparagraph (4), shall pay to the appropriate generation and transmission
electric cooperative the electric delivery replacement tax attributable to the excess property
tax liability by September 10. The amount of electric delivery replacement tax attributable
to the excess property tax liability shall equal that percentage of total electric delivery
replacement tax liability that the excess property tax liability bears to the total property tax
liability contained in the electric delivery tax component. The generation and transmission
electric cooperative shall pay the electric delivery replacement tax attributable to the excess
property tax liability to the appropriate county treasurer.
c. If paragraph “b” is applicable, on or before August 1, the director shall notify each
distribution electric cooperative member, each municipal utility purchasing member, and
§437A.15, TAXES ON ELECTRICITY AND NATURAL GAS PROVIDERS 24
each generation and transmission electric cooperative of the amount of electric delivery
replacement tax to be paid to the generation and transmission electric cooperative. On or
beforeAugust1, thedirectorshallnotifythegenerationandtransmissionelectriccooperative
of the amount of replacement tax liability attributable to the excess property tax liability that
is payable to each county treasurer. The director shall determine the amount of any special
utility property tax levy or tax credit attributable to the excess property tax liability which
shall be reflected in the amount required to be paid by each distribution electric cooperative
member and each municipal utility purchasing member to the generation and transmission
electric cooperative.
d. If, during the tax year, a taxpayer transferred operating property or an interest in
operating property to another taxpayer, the transferee taxpayer’s replacement tax associated
with that property shall be allocated, for the tax year in which the transfer occurred, under
this section in accordance with the general allocation formula on the basis of the general
property tax equivalents of the transferor taxpayer.
e. Notwithstanding the provisions of this section, if during the tax year a person who was
not a taxpayer during the prior tax year acquires a new major addition, as defined in section
437A.3, subsection 18, paragraph “a”, subparagraph (4), the replacement tax associated with
that major addition shall be allocated, for that tax year, under this section in accordance with
thegeneralallocatingformulaonthebasisofthegeneralpropertytaxequivalentsestablished
under paragraph “a” of this subsection, except that the levy rates established and reported to
thedepartmentofmanagementonorbeforeJune30followingthetaxyearinwhichthemajor
addition was acquired shall be applied to the prorated assessed value of the major addition.
For purposes of this paragraph, “prorated assessed value of the major addition” means the
assessed value of the major addition as of January 1 of the year following the tax year in
which the major addition was acquired multiplied by the percentage derived by dividing the
number of months that the major addition existed during the tax year by twelve, counting
any portion of a month as a full month.
f. Notwithstanding the provisions of this section, if a taxpayer is a municipal utility or a
municipal owner of an electric power facility financed under the provisions of chapter 28F
or 476A, the assessed value, other than the local amount, of a new electric power generating
plant shall be allocated to each taxing district in which the municipal utility or municipal
owner is serving customers and has electric meters in operation in the ratio that the number
of operating electric meters of the municipal utility or municipal owner located in the taxing
district bears to the total number of operating electric meters of the municipal utility or
municipal owner in the state as of January 1 of the tax year. If the municipal utility or
municipal owner of an electric power facility financed under the provisions of chapter 28F
or 476A has a new electric power generating plant but the municipal utility or municipal
owner has no operating electric meters in this state, the municipal utility or municipal owner
shall pay the replacement generation tax associated with the new electric power generating
plant allocation of the local amount to the county treasurer of the county in which the local
amount is located and shall remit the remaining replacement generation tax, if any, to the
director at the times contained in section 437A.8, subsection 4, for remittance of the tax to
the county treasurers. All remaining replacement generation tax revenues received by the
director shall be appropriated annually to the department of health and human services to
supplement any appropriation made for medical assistance.
4. a. On or before August 31 following tax years 1999, 2000, and 2001, each county
treasurer shall compute a special utility property tax levy or tax credit for each taxpayer for
which a replacement tax liability for each such tax year is reported to the county treasurer
pursuant to subsection 1, and shall notify the taxpayer of the amount of such tax levy or tax
credit. The amount of the special utility property tax levy or credit shall be determined for
each taxpayer by the county treasurer by comparing the taxpayer’s total replacement tax
liability allocated to taxing districts in the county pursuant to this section with the anticipated
tax revenues from the taxpayer for all taxing districts in the county. If the taxpayer’s total
replacement tax liability allocated to taxing districts in the county is less than the anticipated
tax revenues from the taxpayer for all taxing districts in the county, the county treasurer
shall levy a special utility property tax equal to the shortfall which shall be added to and
25 TAXES ON ELECTRICITY AND NATURAL GAS PROVIDERS, §437A.15
collected with the replacement tax owed by the taxpayer to the county treasurer for the
tax year pursuant to section 437A.8, subsection 4. If the taxpayer’s total replacement tax
liability allocated to taxing districts in the county exceeds the anticipated tax revenues from
the taxpayer for all taxing districts in the county, the county treasurer shall issue a credit to
the taxpayer which shall be applied to reduce the taxpayer’s replacement tax liability to the
county treasurer for the tax year. If the taxpayer’s total replacement tax liability allocated
to taxing districts in the county equals the anticipated tax revenues from the taxpayer for
all taxing districts in the county, no levy or credit is required. Replacement tax liability
for purposes of this subsection means replacement tax liability before credits allowed by
section 437A.8, subsection 7. A recalculation of a special utility property tax levy or credit
shall not be made as a result of a subsequent recalculation of replacement tax liability
under section 437A.8, subsection 7, or adjustment to assessed value under section 437A.19,
subsection 2, paragraph “a”, subparagraph (6). “Anticipated tax revenues from a taxpayer”
means the product of the total levy rates imposed by the taxing districts and the value of
taxpayer property allocated to the taxing districts and reported to the county auditor. Special
utility property tax levies and credits shall be treated as replacement taxes for purposes
of section 437A.11. If a special utility property tax levy payment becomes delinquent, the
delinquent payment shall accrue interest and penalty in the same manner and amount as
the replacement tax under section 437A.13.
b. It is the intent of the general assembly that the general assembly evaluate the impact
of the imposition of the replacement tax for purposes of determining whether this subsection
shall remain in effect and whether a determination shall be made as to the necessity of a
recalculation as provided in this subsection for tax years beginning after tax year 2000.
5. The replacement tax, as adjusted by any special utility property tax levy or credit
and remitted to a county treasurer by each taxpayer, shall be treated as a property tax
when received and shall be disposed of by the county treasurer as taxes on real estate.
Notwithstanding the allocation provisions of this section, nothing in this section shall deny
any affected taxing entity, as defined in section 403.17, subsection 1, which has enacted an
ordinance or entered into an agreement for the division and allocation of taxes authorized
under section 403.19 and under which ordinance or agreement the taxes collected in respect
of properties owned by any of the taxpayers remitting replacement taxes pursuant to the
provisions of this chapter are being divided and allocated, the right to receive its share of
the replacement tax revenues collected for any year which would otherwise be paid to such
affected taxing entity under the terms of any such ordinance or agreement had this chapter
not been enacted. To the extent that adjustment must be made to the allocation described in
this section to give effect to the terms of such ordinances or agreements, the department of
management and the county treasurer shall make such adjustments.
6. In lieu of the adjustment provided for in subsection 5, the assessed value of property
described in section 403.19, subsection 1, may be reduced by the city or county by the amount
of the taxable value of the property described in section 437A.16 included in such area on
January 1, 1997, pursuant to amendment of the ordinance adopted by such city or county
pursuant to section 403.19.
7. a. The department of management, in consultation with the department of revenue,
shall coordinate the utility replacement tax task force and provide staffing assistance to the
task force. It is the intent of the general assembly that the task force include representatives
of the department of management, department of revenue, electric companies, natural gas
companies, municipal utilities, electric cooperatives, counties, cities, school boards, and
industrial, commercial, and residential consumers, and other appropriate stakeholders.
The director of the department of management and the director of revenue shall serve as
co-chairpersons of the task force.
b. The task force shall study the effects of the replacement taxes under this chapter and
chapter 437B on local taxing authorities, local taxing districts, consumers, and taxpayers
through January 1, 2024. If the task force recommends modifications to the replacement
tax that will further the purposes of tax neutrality for local taxing authorities, local taxing
§437A.15, TAXES ON ELECTRICITY AND NATURAL GAS PROVIDERS 26
districts, taxpayers, and consumers, consistent with the stated purposes of this chapter, the
department of management shall transmit those recommendations to the general assembly.