Text: HF02483 Text: HF02485 Text: HF02400 - HF02499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 422.60, subsection 2, Code 1997, is 1 2 amended by adding the following new unnumbered paragraph after 1 3 unnumbered paragraph 1: 1 4 NEW UNNUMBERED PARAGRAPH. A nonqualified credit union 1 5 incorporated or authorized to do business under chapter 533 is 1 6 not subject to the state alternative minimum tax. 1 7 Sec. 2. Section 422.61, Code Supplement 1997, is amended 1 8 by adding the following new subsection: 1 9 NEW SUBSECTION. 0A. "Equity" means, in the case of a 1 10 credit union, the sum of the regular reserves, investment 1 11 valuation reserves, other reserves, undivided earnings, plus 1 12 net income of the credit union as reflected in its annual 1 13 report under section 533.6. In the case of a credit union 1 14 designated as serving predominately low-income members, 1 15 "equity" also includes uninsured secondary capital. 1 16 Sec. 3. Section 422.61, subsection 1, Code Supplement 1 17 1997, is amended to read as follows: 1 18 1. "Financial institution" means a state bank as defined 1 19 in section 524.103, subsection 33, a state bank chartered 1 20 under the laws of any other state, a national banking 1 21 association, a trust company, a federally chartered savings 1 22 and loan association, an out-of-state state chartered savings 1 23 bank, a financial institution chartered by the federal home 1 24 loan bank board, a non-Iowa chartered savings and loan 1 25 association, an association incorporated or authorized to do 1 26 business under chapter 534, a nonqualified credit union 1 27 incorporated or authorized to do business under chapter 533, a 1 28 nonqualified credit union incorporated or authorized to do 1 29 business under the laws of another state, or a production 1 30 credit association. 1 31 Sec. 4. Section 422.61, subsection 3, unnumbered paragraph 1 32 1, Code Supplement 1997, is amended to read as follows: 1 33 "Net income" in cases other than credit unions means the 1 34 net income of the financial institution computed in accordance 1 35 with section 422.35, with the following adjustments: 2 1 Sec. 5. Section 422.61, subsection 3, Code Supplement 2 2 1997, is amended by adding the following new unnumbered 2 3 paragraph: 2 4 NEW UNNUMBERED PARAGRAPH. "Net income", in the case of a 2 5 nonqualified credit union taxed under this division, means the 2 6 increase in the amount of equity of the credit union at the 2 7 end of the fiscal year as reflected in its annual report under 2 8 section 533.6 over the amount of equity of the credit union at 2 9 the end of the previous fiscal year as reflected in the 2 10 previous year's annual report under section 533.6. 2 11 Sec. 6. Section 422.61, Code Supplement 1997, is amended 2 12 by adding the following new subsection: 2 13 NEW SUBSECTION. 3A. "Nonqualified credit union" means a 2 14 credit union that does not meet the requirements to be a 2 15 qualified credit union, as defined in section 533.24, 2 16 subsection 3. 2 17 Sec. 7. Section 422.62, Code 1997, is amended to read as 2 18 follows: 2 19 422.62 DUE AND DELINQUENT DATES. 2 20 The franchise tax is due and payable on the first day 2 21 following the end of the taxable year of each financial 2 22 institution, and is delinquent after the last day of the 2 23 fourth month following the due date or for financial 2 24 institutions that are not credit unions forty-five days after 2 25 the due date of the federal tax return, excluding extensions 2 26 of time to file, whichever is the later. Every financial 2 27 institution shall file a return as prescribed by the director 2 28 on or before the delinquency date. 2 29 Sec. 8. Section 533.24, Code 1997, is amended to read as 2 30 follows: 2 31 533.24 TAXATION. 2 32 1. A credit union shall be deemed an institution for 2 33 savings and is subject to taxation only as to its real estate 2 34 and moneys and credits, except those credit unions subject to 2 35 the state franchise tax. The shares shall not be taxed. 3 1 2. The moneys and credits tax on credit unions, except 3 2 those credit unions subject to the state franchise tax, is 3 3 imposed at a rate of five mills on each dollar of the legal 3 4 and special reserves which are required to be maintained by 3 5 the credit union under section 533.17, and shall be levied by 3 6 the board of supervisors, and placed upon the tax list and 3 7 collected by the county treasurer, except that an exemption 3 8 shall be given to each credit union in the amount of forty 3 9 thousand dollars. The amount collected in each taxing 3 10 district within a city shall be apportioned twenty percent to 3 11 the county, thirty percent to the city general fund, and fifty 3 12 percent to the general fund of the state, and the amount 3 13 collected in each taxing district outside of cities shall be 3 14 apportioned fifty percent to the county and fifty percent to 3 15 the general fund of the state. The moneys and credits tax 3 16 shall be collected at the location of the credit union as 3 17 shown in its articles of incorporation. 3 18 3. Credit unions which do not meet the requirements of a 3 19 qualified credit union as specified in this subsection are 3 20 subject to the state franchise tax imposed in chapter 422, 3 21 division V. 3 22 a. A credit union is a qualified credit union if it meets 3 23 all of the following requirements: 3 24 (1) It has less than twenty-five million dollars in 3 25 assets. 3 26 (2) Its members share a common bond of association such 3 27 as, but not limited to, a single common employer, a common 3 28 occupation, or residence within a specific geographic 3 29 boundaries which boundaries shall not exceed the county where 3 30 the main office of the credit union is located and any 3 31 contiguous and cornering counties. 3 32 (3) It does not accept commercial or business-related 3 33 deposits and does not make or participate in commercial or 3 34 business purpose loans. 3 35 b. For purposes of this subsection: 4 1 (1) "Agricultural purpose" means the same as defined in 4 2 section 535.13. 4 3 (2) "Business purpose" means a for-profit activity by an 4 4 individual or a for-profit entity including, but not limited 4 5 to, a commercial, service, or industrial enterprise carried on 4 6 for profit, or an investment activity. 4 7 (3) "Commercial loan" means a loan to an individual or 4 8 entity for a business purpose or an agricultural purpose. 4 9 Commercial loan shall not include a loan the proceeds of which 4 10 will be used primarily for the purchase, construction, or 4 11 improvement of real property, including a single-family or a 4 12 two-family dwelling occupied or to be occupied by the 4 13 borrower. 4 14 (4) "Commercial or business-related deposit" means a 4 15 payment for shares, or a deposit, for which a credit union has 4 16 given or is obligated to give credit to an account, a 4 17 certificate of deposit or like certificate, or a share draft 4 18 drawn against such an account, made by an individual for a 4 19 business purpose or an agricultural purpose or made by a for- 4 20 profit entity. 4 21 (5) "Loan" includes the refinancing of a contract of sale, 4 22 and the refinancing of a prior loan, whether or not the 4 23 borrower was also the borrower under the prior loan, and the 4 24 assumption of a prior loan. 4 25 Sec. 9. This Act applies to taxable years beginning on or 4 26 after the effective date of this Act. 4 27 EXPLANATION 4 28 The bill applies the franchise tax, currently imposed on 4 29 other financial institutions doing business in Iowa and 4 30 subject to taxation by the state, to chartered credit unions 4 31 of this or another state that do not meet certain 4 32 requirements. 4 33 These requirements include assets of less than $25 million; 4 34 its members sharing a common bond such as single employer, 4 35 occupation, or residence within a specific geographic 5 1 boundaries which do not exceed the county where the main 5 2 office is located and any contiguous and cornering counties; 5 3 and it does not accept commercial or business-related 5 4 deposits, and does not make or participate in commercial or 5 5 business purpose loans. 5 6 For the purposes of computing the tax, "net income" for a 5 7 community-based credit union is defined as the increase in the 5 8 equity of the credit union during the taxable year. 5 9 The moneys and credit tax currently imposed on all credit 5 10 unions is made inapplicable for those credit unions that are 5 11 subject to the franchise tax. 5 12 The bill applies to taxable years beginning on or after the 5 13 effective date of the bill 5 14 LSB 4019HH 77 5 15 mg/cf/24
Text: HF02483 Text: HF02485 Text: HF02400 - HF02499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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