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To amend sections 5727.01, 5727.11, and 5727.111 of | 1 |
the Revised Code to modify the tax valuation of | 2 |
public utility tangible personal property used to | 3 |
generate electricity from renewable resources. | 4 |
Section 1. That sections 5727.01, 5727.11, and 5727.111 of | 5 |
the Revised Code be amended to read as follows: | 6 |
Sec. 5727.01. As used in this chapter: | 7 |
(A) "Public utility" means each person referred to as a | 8 |
telephone company, telegraph company, electric company, natural | 9 |
gas company, pipe-line company, water-works company, water | 10 |
transportation company, heating company, rural electric company, | 11 |
railroad company, or combined company. | 12 |
(B) "Gross receipts" means the entire receipts for business | 13 |
done by any person from operations as a public utility, or | 14 |
incidental thereto, or in connection therewith, including any | 15 |
receipts received under Chapter 4928. of the Revised Code. The | 16 |
gross receipts for business done by an incorporated company | 17 |
engaged in operation as a public utility includes the entire | 18 |
receipts for business done by such company under the exercise of | 19 |
its corporate powers, whether from the operation as a public | 20 |
utility or from any other business. | 21 |
(C) "Rural electric company" means any nonprofit corporation, | 22 |
organization, association, or cooperative engaged in the business | 23 |
of supplying electricity to its members or persons owning an | 24 |
interest therein in an area the major portion of which is rural. | 25 |
(D) Any person: | 26 |
(1) Is a telegraph company when engaged in the business of | 27 |
transmitting telegraphic messages to, from, through, or in this | 28 |
state; | 29 |
(2) Is a telephone company when primarily engaged in the | 30 |
business of providing local exchange telephone service, excluding | 31 |
cellular radio service, in this state; | 32 |
(3) Is an electric company when engaged in the business of | 33 |
generating, transmitting, or distributing electricity within this | 34 |
state for use by others, but excludes a rural electric company; | 35 |
(4) Is a natural gas company when engaged in the business of | 36 |
supplying or distributing natural gas for lighting, power, or | 37 |
heating purposes to consumers within this state, excluding a | 38 |
person that is a governmental aggregator or retail natural gas | 39 |
supplier as defined in section 4929.01 of the Revised Code; | 40 |
(5) Is a pipe-line company when engaged in the business of | 41 |
transporting natural gas, oil, or coal or its derivatives through | 42 |
pipes or tubing, either wholly or partially within this state; | 43 |
(6) Is a water-works company when engaged in the business of | 44 |
supplying water through pipes or tubing, or in a similar manner, | 45 |
to consumers within this state; | 46 |
(7) Is a water transportation company when engaged in the | 47 |
transportation of passengers or property, by boat or other | 48 |
watercraft, over any waterway, whether natural or artificial, from | 49 |
one point within this state to another point within this state, or | 50 |
between points within this state and points without this state; | 51 |
(8) Is a heating company when engaged in the business of | 52 |
supplying water, steam, or air through pipes or tubing to | 53 |
consumers within this state for heating purposes; | 54 |
(9) Is a railroad company when engaged in the business of | 55 |
owning or operating a railroad either wholly or partially within | 56 |
this state on rights-of-way acquired and held exclusively by such | 57 |
company, or otherwise, and includes a passenger, street, suburban, | 58 |
or interurban railroad company. | 59 |
As used in division (D)(2) of this section, "local exchange | 60 |
telephone service" means making available or furnishing access and | 61 |
a dial tone to all persons within a local calling area for use in | 62 |
originating and receiving voice grade communications over a | 63 |
switched network operated by the provider of the service within | 64 |
the area and for gaining access to other telecommunication | 65 |
services. | 66 |
(E) "Taxable property" means the property required by section | 67 |
5727.06 of the Revised Code to be assessed by the tax | 68 |
commissioner, but does not include either of the following: | 69 |
(1) An item of tangible personal property that for the period | 70 |
subsequent to the effective date of an air, water, or noise | 71 |
pollution control certificate and continuing so long as the | 72 |
certificate is in force, has been certified as part of the | 73 |
pollution control facility with respect to which the certificate | 74 |
has been issued; | 75 |
(2) An item of tangible personal property that during the | 76 |
construction of a plant or facility and until the item is first | 77 |
capable of operation, whether actually used in operation or not, | 78 |
is incorporated in or being held exclusively for incorporation in | 79 |
that plant or facility. | 80 |
Notwithstanding section 5701.03 of the Revised Code, for tax | 81 |
year 2006 and thereafter, "taxable property" includes patterns, | 82 |
jigs, dies, and drawings of an electric company or a combined | 83 |
company for use in the activity of an electric company. | 84 |
(F)
"Taxing district" means a municipal corporation | 85 |
township, or part thereof, in which the aggregate rate of taxation | 86 |
is uniform. | 87 |
(G) "Telecommunications service" has the same meaning as in | 88 |
division (AA) of section 5739.01 of the Revised Code. | 89 |
(H) "Interexchange telecommunications company" means a person | 90 |
that is engaged in the business of transmitting telephonic | 91 |
messages to, from, through, or in this state, but that is not a | 92 |
telephone company. | 93 |
(I) "Sale and leaseback transaction" means a transaction in | 94 |
which a public utility or interexchange telecommunications company | 95 |
sells any tangible personal property to a person other than a | 96 |
public utility or interexchange telecommunications company and | 97 |
leases that property back from the buyer. | 98 |
(J) "Production equipment" means all taxable steam, nuclear, | 99 |
hydraulic, and other production plant equipment used to generate | 100 |
electricity. For tax years prior to 2001, "production equipment" | 101 |
includes taxable station equipment that is located at a production | 102 |
plant. | 103 |
(K) "Tax year" means the year for which property or gross | 104 |
receipts are subject to assessment under this chapter. This | 105 |
division does not limit the tax commissioner's ability to assess | 106 |
and value property or gross receipts outside the tax year. | 107 |
(L) "Combined company" means any person engaged in the | 108 |
activity of an electric company or rural electric company that is | 109 |
also engaged in the activity of a heating company or a natural gas | 110 |
company, or any combination thereof. | 111 |
(M) "Public utility property lessor" means any person, other | 112 |
than a public utility or an interexchange telecommunications | 113 |
company, that leases personal property, other than in a sale and | 114 |
leaseback transaction, to a public utility, other than a railroad, | 115 |
water transportation, telephone, or telegraph company if the | 116 |
property would be taxable property if owned by the public utility. | 117 |
A public utility property lessor is subject to this chapter only | 118 |
for the purposes of reporting and paying tax on taxable property | 119 |
it leases to a public utility other than a telephone or telegraph | 120 |
company. A public utility property lessor that leases property to | 121 |
a public utility other than a telephone or telegraph company is | 122 |
not a public utility, but it shall report its property and be | 123 |
assessed in the same manner as the utility to which it leases the | 124 |
property. | 125 |
(N) "Renewable resource" means solar photovaltaic or solar | 126 |
thermal energy or wind energy. | 127 |
Sec. 5727.11. (A) Except as otherwise provided in this | 128 |
section, the true value of all taxable property, except property | 129 |
of a railroad company, required by section 5727.06 of the Revised | 130 |
Code to be assessed by the tax commissioner shall be determined by | 131 |
a method of valuation using cost as capitalized on the public | 132 |
utility's books and records less composite annual allowances as | 133 |
prescribed by the commissioner. If the commissioner finds that | 134 |
application of this method will not result in the determination of | 135 |
true value of the public utility's taxable property, the | 136 |
commissioner may use another method of valuation. | 137 |
(B)(1) Except as provided in division (B)(2) of this section, | 138 |
the true value of current gas stored underground is the cost of | 139 |
that gas shown on the books and records of the public utility on | 140 |
the thirty-first day of December of the preceding year. | 141 |
(2) For tax year 2001 and thereafter, the true value of | 142 |
current gas stored underground is the quotient obtained by | 143 |
dividing (a) the average value of the current gas stored | 144 |
underground, which shall be determined by adding the value of the | 145 |
gas on hand at the end of each calendar month in the calendar year | 146 |
preceding the tax year, or, if applicable, the last day of | 147 |
business of each month for a partial month, divided by (b) the | 148 |
total number of months the natural gas company was in business | 149 |
during the calendar year prior to the beginning of the tax year. | 150 |
with the approval of the tax commissioner, a natural gas company | 151 |
may use a date other than the end of a calendar month to value its | 152 |
current gas stored underground. | 153 |
(C) The true value of noncurrent gas stored underground is | 154 |
thirty-five per cent of the cost of that gas shown on the books | 155 |
and records of the public utility on the thirty-first day of | 156 |
December of the preceding year. | 157 |
(D)(1) Except as provided in | 158 |
(3) of this section, the true value of the production equipment of | 159 |
an electric company and the true value of all taxable property of | 160 |
a rural electric company is the equipment's or property's cost as | 161 |
capitalized on the company's books and records less fifty per cent | 162 |
of that cost as an allowance for depreciation and obsolescence. | 163 |
(2) The true value of the production equipment of an electric | 164 |
company or rural electric company purchased, transferred, or | 165 |
placed
into service
after | 166 |
July 6, 1999, is the purchase price of the equipment as | 167 |
capitalized on the company's books and records less composite | 168 |
annual allowances as prescribed by the tax commissioner. | 169 |
(3) For tax year 2010 and each tax year thereafter, the true | 170 |
value of the taxable property of an electric company that is used | 171 |
to produce electricity from a renewable resource is the purchase | 172 |
price of the equipment as capitalized on the company's books and | 173 |
records without deduction of composite annual allowances. | 174 |
(E) The true value of taxable property, except property of a | 175 |
railroad company, required by section 5727.06 of the Revised Code | 176 |
to be assessed by the tax commissioner shall not include the | 177 |
allowance for funds used during construction or interest during | 178 |
construction that has been capitalized on the public utility's | 179 |
books and records as part of the total cost of the taxable | 180 |
property. This division shall not apply to the taxable property of | 181 |
an electric company or a rural electric company, excluding | 182 |
transmission and distribution property, first placed into service | 183 |
after December 31, 2000, or to the taxable property a person | 184 |
purchases, which includes transfers, if that property was used in | 185 |
business by the seller prior to the purchase. | 186 |
(F) The true value of watercraft owned or operated by a water | 187 |
transportation company shall be determined by multiplying the true | 188 |
value of the watercraft as determined under division (A) of this | 189 |
section by a fraction, the numerator of which is the number of | 190 |
revenue-earning miles traveled by the watercraft in the waters of | 191 |
this state and the denominator of which is the number of | 192 |
revenue-earning miles traveled by the watercraft in all waters. | 193 |
(G) The cost of property subject to a sale and leaseback | 194 |
transaction is the cost of the property as capitalized on the | 195 |
books and records of the public utility owning the property | 196 |
immediately prior to the sale and leaseback transaction. | 197 |
(H) The cost as capitalized on the books and records of a | 198 |
public utility includes amounts capitalized that represent | 199 |
regulatory assets, if such amounts previously were included on the | 200 |
company's books and records as capitalized costs of taxable | 201 |
personal property. | 202 |
(I) Any change in the composite annual allowances as | 203 |
prescribed by the commissioner on a prospective basis shall not be | 204 |
admissible in any judicial or administrative action or proceeding | 205 |
as evidence of value with regard to prior years' taxes. | 206 |
Information about the business, property, or transactions of any | 207 |
taxpayer obtained by the commissioner for the purpose of adopting | 208 |
or modifying the composite annual allowances shall not be subject | 209 |
to discovery or disclosure. | 210 |
Sec. 5727.111. The taxable property of each public utility, | 211 |
except a railroad company, and of each interexchange | 212 |
telecommunications company shall be assessed at the following | 213 |
percentages of true value: | 214 |
(A) Fifty per cent in the case of the taxable transmission | 215 |
and distribution property of a rural electric company, and | 216 |
twenty-five per cent for all its other taxable property; | 217 |
(B) In the case of a telephone or telegraph company, | 218 |
twenty-five per cent for taxable property first subject to | 219 |
taxation in this state for tax year 1995 or thereafter for tax | 220 |
years before tax year 2007, and pursuant to division (H) of | 221 |
section 5711.22 of the Revised Code for tax year 2007 and | 222 |
thereafter, and the following for all other taxable property: | 223 |
(1) For tax years prior to 2005, eighty-eight per cent; | 224 |
(2) For tax year 2005, sixty-seven per cent; | 225 |
(3) For tax year 2006, forty-six per cent; | 226 |
(4) For tax year 2007 and thereafter, pursuant to division | 227 |
(H) of section 5711.22 of the Revised Code. | 228 |
(C) Twenty-five per cent in the case of a natural gas | 229 |
company. | 230 |
(D) Eighty-eight per cent in the case of a pipe-line, | 231 |
water-works, or heating company; | 232 |
(E)(1) For tax year 2005, eighty-eight per cent in the case | 233 |
of the taxable transmission and distribution property of an | 234 |
electric company, and twenty-five per cent for all its other | 235 |
taxable property; | 236 |
(2) For tax | 237 |
2007, 2008, and 2009, eighty-five per cent in the case of the | 238 |
taxable transmission and distribution property of an electric | 239 |
company, and twenty-four per cent for all its other taxable | 240 |
property; | 241 |
(3) For tax year 2010 and each tax year thereafter, of the | 242 |
taxable property of an electric company: | 243 |
(a) Eighty-five per cent in the case of the taxable | 244 |
transmission and distribution property; | 245 |
(b) Twelve per cent in the case of taxable property used to | 246 |
produce electricity from renewable resources; | 247 |
(c) Twenty-four per cent for all its other taxable property. | 248 |
(F)(1) Twenty-five per cent in the case of an interexchange | 249 |
telecommunications company for tax years before tax year 2007; | 250 |
(2) Pursuant to division (H) of section 5711.22 of the | 251 |
Revised Code for tax year 2007 and thereafter. | 252 |
(G) Twenty-five per cent in the case of a water | 253 |
transportation company. | 254 |
Section 2. That existing sections 5727.01, 5727.11, and | 255 |
5727.111 of the Revised Code are hereby repealed. | 256 |