Iowa: Effort To Resuscitate Tax

The Iowa Bankers Association, which helped draft the bill to tax the state's largest credit unions, was working last week to resuscitate the dying measure, rendered lifeless by the prior's week's decision by Senate leaders to withhold action on it.

John Sorensen, president of the IBA, said his group had convinced Senate Majority Leader Stewart Iverson, R-Dows, to reconsider a decision by the Republican caucus, which controls the state Senate, to set the bill aside and not put it to a vote.

"We think the Republican caucus will likely revisit the issue, We can demonstrate we have pretty good support in the Senate," said Sorensen.

The bill, which would apply the state's 5% corporate franchise tax to state-chartered credit unions over $100 million in assets and operating in multiple counties, has passed the Senate Commerce Committee.

Iverson said he will agree to move the bill to a vote if the bankers demonstrate to him they have the 26 votes necessary for passage in the 50-member Senate. "I told them if they can show me they have 27 votes I would reconsider," he explained.

Rep. Lance Horbach, R-Tama, the chief architect of the tax bill, said he will not push the measure in the House if the Senate sets it aside. "It's such a controversial issue, unless I see any agreement among my members I would not want to subject them to a vote on the bill," he said.

Iverson instructed both the bankers and the Iowa CU League last week to show him their "vote cards" to show how much support they have. "I want to see both sides," he said.

Both Sorensen and Pat Jury, chief lobbyist for the Iowa CU League, were claiming last week they had presented the Senate Majority Leader with enough pledges to win the day.

"I don't think there's anyone in the (Republican) caucus who wants to bring this back up," said Jury. "A lot of people thought it was laid to rest. It was a relief to some people."

The bill would apply to six credit unions and cost them as much as $1.4 million a year.

Iowa is already one of only five states to tax credit unions, charging all state charters a 0.5% "Monies and Credit Tax" on legal and special reserves.