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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