ARIZONA STATE SENATE
Phoenix, Arizona
REVISED
water resources; annual
report
(NOW: electric utilities; valuation)
Retroactive to January 1,
2002, freezes valuations for existing electric generation properties for tax
year 2003 and creates an allocation method to distribute the values to the
taxing jurisdictions.
Prior to deregulation, the
electric utilities provided customers with a total package of all electric
services. Under traditional monopoly regulation, the generation, transmission
and distribution of power are all provided by one utility company. Under
deregulation, customers can select providers of electricity, while transmission
and distribution services will continue to be provided by utilities in a
regulated environment.
Electrical generation
facilities are defined as facilities that generate electricity and are used by
both electric wholesalers and retailers. Electric retailers distribute and
transmit electricity through utility properties . Laws 2000, chapter 384
established a property tax valuation schedule for electric generation
facilities, basing valuations on gradually increasing percentages of the
scheduled depreciated value. Currently, all utilities are classified, for
property tax purposes, as class one properties, which are assessed at 25
percent.
H.B. 2063, retroactive to
January 1, 2002, freezes valuations for existing electric generation properties
for tax year 2003 and creates an allocation method to distribute the values to
the taxing jurisdictions.
A fiscal note has been
requested from Joint Legislative Budget Committee staff.
1. Provides a method for allocation for tax year 2003 among the various taxing jurisdictions the generation, transmission and distribution properties of the electric utilities. Specifies that generation values will be combined with distribution values for purposes of allocation.
2. Excludes electric generation property and nonprofit electric distribution cooperatives from the valuation methodology of this measure.
3. Requires voluntary contributions to be made to offset losses in tax years 2001 through 2003.
4. Provides that voluntary contributions be made to offset tax revenue losses in tax year 2003 and, if the counties fail to reach 90 percent of the counties' 2000 assessed valuation, in tax year 2004.
5. Requires existing electrical generation plants or units valued by the Department of Revenue (DOR) in tax year 2002 to be valued at the final tax year 2002 full cash value for tax year 2003 and provides for this value to be combined with the value of transmission and distribution property for allocation purposes.
6. Requires the amount of tax revenue that would be lost in tax years 2000-2001 through 2002-2003 to be paid to the county treasurer by August 1 of the respective tax year and specifies that the amount collected will be used to reduce the tax rates for tax years 2000-2001 through 2002-2003.
7. Directs all companies owning electric generation property valued by DOR for tax year 2002 to provide, by July 1, 2002, the information otherwise required to determine the full cash value for tax year 2003. Assesses a fine of $1000 per day for noncompliance and allows the Director to waive a portion of the required information, to extend the deadline at the Director’s discretion and to abate the penalty for reasonable cause.
8. Specifies that plants placed in service between December 31, 2000 and December 31, 2001 shall be valued pursuant to the statutory valuation procedure for electric generation properties.
9. Repeals, on December 31, 2004, the new formula for valuations of existing electrical generation property for the tax year 2003 and the related reporting requirements to DOR.
10. Deletes the definition of "generation and transmission cooperative."
11. Defines "transmission cooperative."
12. Makes technical and conforming changes.
13. Contains a retroactivity clause of January 1, 2002.
Amendments Adopted by Committee
·
The
strike everything amendment was adopted.
Amendments Adopted by Committee of the Whole
1.
Excludes
electric generation property and nonprofit electric distribution cooperatives
from the valuation methodology of this measure.
2.
Specifies
that the new methodology and basis for allocations will only apply to tax year
2003 and reinstates current allocation methodology.
3.
Requires
voluntary contributions to be made to also offset losses in tax year 2003.
4.
Requires
the amount of tax revenue that would be lost in tax years 2000-2001 through
2002-2003 to be paid to the county treasurer by August 1 of the respective tax
year and specifies that the amount collected will be used to reduce the tax
rates for tax years 2000-2001 through 2002-2003.
5.
Clarifies
that, if the counties fail to reach 90 percent of the counties’ 2000 assessed
valuation for the tax year 2004, voluntary contributions must be made to each
taxing jurisdiction to offset losses.
6.
Requires
companies owning electric generation property valued by DOR for the tax year
2002 to file, by July 1, 2002, information otherwise required to determine the
full cash value for tax year 2003.
7.
Allows
the Director of the Department of Revenue to waive a portion of the required
information.
8.
Deletes
the definition of “generation and
transmission cooperative.”
9.
Defines
“transmission cooperative.”
10.
Makes
technical and conforming changes.
Senate Action
NRAE 4/25/02 DPA/SE 5-0-3-0
3rd Read 5/2/02 28-0-2-0
Prepared by Senate Staff
May 3, 2002