Text: HF00543 Text: HF00545 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 533.24, Code 1999, is amended to read
1 2 as follows:
1 3 533.24 TAXATION.
1 4 1. A qualified credit union shall be deemed an institution
1 5 for savings and is subject to taxation only as to its real
1 6 estate and moneys and credits, and, if it is not a qualified
1 7 credit union, is subject to taxation as provided in section
1 8 422.35A and chapter 422, division III. The shares shall not
1 9 be taxed.
1 10 2. The moneys and credits tax on qualified credit unions
1 11 is imposed at a rate of five mills on each dollar of the legal
1 12 and special reserves which are required to be maintained by
1 13 the credit union under section 533.17, and shall be levied by
1 14 the board of supervisors, and placed upon the tax list and
1 15 collected by the county treasurer, except that an exemption
1 16 shall be given to each credit union in the amount of forty
1 17 thousand dollars. The amount collected in each taxing
1 18 district within a city shall be apportioned twenty percent to
1 19 the county, thirty percent to the city general fund, and fifty
1 20 percent to the general fund of the state, and the amount
1 21 collected in each taxing district outside of cities shall be
1 22 apportioned fifty percent to the county and fifty percent to
1 23 the general fund of the state. The moneys and credits tax
1 24 shall be collected at the location of the credit union as
1 25 shown in its articles of incorporation.
1 26 3. a. For purposes of this section, unless the context
1 27 otherwise requires, "qualified credit union" means a credit
1 28 union which satisfies all of the following:
1 29 (1) Has less than thirty million dollars in assets.
1 30 (2) Members of the credit union share a common bond of
1 31 association such as, but not limited to, a single common
1 32 employer, a common occupation, or residence within a specific
1 33 geographic boundary which shall not exceed the county where
1 34 the main office of the credit union is located and counties
1 35 contiguous to or cornering upon the county in which the main
2 1 office of the credit union is located.
2 2 (3) Does not accept commercial or business-related
2 3 deposits and does not make or participate in commercial loans.
2 4 b. For purposes of this subsection:
2 5 (1) "Agricultural purpose" means as defined in section
2 6 535.13.
2 7 (2) "Business purpose" means a for-profit activity by an
2 8 individual or a for-profit entity including, but not limited
2 9 to, a commercial, service, or industrial enterprise carried on
2 10 for profit, or an investment activity.
2 11 (3) "Commercial loan" means a loan to an individual or
2 12 entity for a business purpose or an agricultural purpose.
2 13 Commercial loan does not include a loan the proceeds of which
2 14 will be used primarily for the purchase, construction, or
2 15 improvement of real property, including a single-family or a
2 16 two-family dwelling, occupied or to be occupied by the
2 17 borrower.
2 18 (4) "Commercial or business-related deposit" means a
2 19 payment for shares, or a deposit, for which a credit union has
2 20 given or is obligated to give credit to an account, a
2 21 certificate of deposit or like certificate, or a share draft
2 22 drawn against such an account, made by an individual for a
2 23 business purpose or an agricultural purpose or made by a for-
2 24 profit entity.
2 25 (5) "Loan" means providing financing to a person under an
2 26 agreement requiring that the amount in financing be repaid at
2 27 a maturity date, with an interest rate, and other conditions
2 28 as specified in the agreement, and includes the refinancing of
2 29 a contract of sale, the refinancing of a prior loan, whether
2 30 or not the borrower was also the borrower under the prior
2 31 loan, and the assumption of a prior loan.
2 32 Sec. 2. Section 422.34, subsection 1, Code 1999, is
2 33 amended to read as follows:
2 34 1. All state, national, private, co-operative, and savings
2 35 banks, qualified credit unions as defined in section 533.24,
3 1 title insurance and trust companies, savings and loan
3 2 associations, production credit associations, insurance
3 3 companies or insurance associations, reciprocal or inter-
3 4 insurance exchanges, and fraternal beneficiary associations.
3 5 Sec. 3. NEW SECTION. 422.35A NET INCOME OF CREDIT UNION.
3 6 Notwithstanding section 422.35, "net income" for a credit
3 7 union that is not a qualified credit union as defined in
3 8 section 533.24 means the amount of the annual increase in
3 9 equity of the credit union less any credits or deductions
3 10 allowed under section 422.35. The annual increase in equity
3 11 of a credit union shall be its equity at the end of a fiscal
3 12 year as reflected in its annual report filed with the
3 13 superintendent pursuant to section 533.6, less its equity at
3 14 the end of the immediate prior fiscal year as shown in the
3 15 annual report filed with the superintendent pursuant to
3 16 section 533.6 for that prior fiscal year.
3 17 For purposes of this section, "equity" means the sum of the
3 18 regular reserves, investment valuation reserve, accumulated
3 19 unrealized gains or losses on for sale securities, other
3 20 reserves, undivided earning, and net income of a credit union
3 21 as reflected in the annual report filed with the
3 22 superintendent pursuant to section 533.6, less the amount of
3 23 interest and dividends from federal securities to the extent
3 24 included. For low-income credit unions which have been
3 25 designated as serving predominantly low-income members
3 26 pursuant to section 533.4, subsection 1, uninsured secondary
3 27 capital shall also be included in equity.
3 28 Sec. 4. APPLICABILITY. This Act applies to tax years
3 29 beginning on or after January 1, 2000.
3 30 EXPLANATION
3 31 This bill amends provisions relating to the taxation of
3 32 credit unions.
3 33 The bill provides that the net income of a credit union
3 34 which is not a qualified credit union is subject to taxation
3 35 in a manner similar to the taxation on the net income of other
4 1 corporations. A qualified credit union is defined as one
4 2 which has less than $30 million in assets; the members of the
4 3 credit union share a common bond of association such as, but
4 4 not limited to, a single common employer, a common occupation,
4 5 or residence within a specific geographic boundary which shall
4 6 not exceed the county where the main office of the credit
4 7 union is located and counties contiguous to or cornering upon
4 8 the county in which the main office of the credit union is
4 9 located; and the credit union does not accept commercial or
4 10 business-related deposits and does not make or participate in
4 11 commercial or business purpose loans. "Net income" is defined
4 12 as the amount of the annual increase in equity of the credit
4 13 union.
4 14 LSB 2126YH 78
4 15 mj/jw/5
Text: HF00543 Text: HF00545 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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