Reporting Wind Energy and Section 42 Property

Reporting Wind Energy and Section 42 Property under Iowa Code section 427B.26 Abstract, Reconciliation, Wind Energy Abstract

Special Valuation Procedures

Special valuation procedures are codified for the following assessments:

  1. Section 42 Valuation – Iowa Code section 441.21(2) and Iowa Administrative Code rule
    701.102.5(2)
  2. Wind Energy Conversion Property – Iowa Code section 427B.26

Special Valuation Procedure properties do not participate in equalization.

Abstract Reporting

The special procedure valuation for these property types should not be included in the abstract. They should, however, be classified according to the classification criteria for assessment classification.

Reconciliation Reporting

The special procedure valuation for these property types should not be included in the reconciliation.

Section 42 – new construction should be documented as an addition on the reconciliation under “Other” and a deletion under “Other” with an explanation of the value and a comment “new Section 42 construction”.

Wind Energy – reported acquisition cost should be documented as an addition on the reconciliation under “Other” and a deletion under “Other” with an explanation of the value and a comment “acquisition cost for wind energy”.

If there are multiple valuations combined under “Other”, please include the valuation in the comment for each valuation.

Wind Energy Abstract

Wind energy under Iowa Code section 427B.26 is subject to a special valuation procedure:

  • Report to assessor of the net acquisition cost of the wind tower(s)
  • Year 1 of operation has an assessed value of 0%
  • Year 2 has an assessed of 5% of the net acquisition cost
  • Year 3 has an assessed of 10% of the net acquisition cost
  • Year 4 has an assessed of 15% of the net acquisition cost
  • Year 5 has an assessed of 20% of the net acquisition cost
  • Year 6 has an assessed of 25% of the net acquisition cost
  • Year 7 has an assessed of 30% of the net acquisition cost

The assessed value will remain at 30% during the ordinance period but not less than 19 years if the ordinance is repealed. 

This valuation should not be treated as an exemption. The 100% value is the special valuation for each year.

Increases to the valuation under the special valuation procedures can be reported on the reconciliation in the same manner as the net acquisition cost.

There are also wind energy conversion properties that are not subject to the special valuation procedures. If not subject to the utility replacement tax, these properties should be included in your industrial abstract and reconciliation in the same manner as other industrial properties and are subject to equalization.