Vermont lawmakers are considering a bill that would put state-chartered credit unions on an equal footing with their federal counterparts - letting them make business loans and expand their fields of membership.

But bankers there say any change in the state's credit union statute should include a measure to tax credit unions, and the Vermont Bankers Association is already floating the idea among lawmakers.

Christopher D'Elia, the trade group's president, said this week that he is seeking a sponsor for an amendment to the bill being mulled that would apply the state's franchise tax to credit unions.

If Mr. D'Elia succeeds, Vermont would be the first state this year to consider taxing its credit unions. Bills extending income or franchise taxes to them were introduced in Iowa, Oregon, Utah, and New Mexico last year, but they were all defeated.

Mr. D'Elia concedes that his proposal faces long odds. "Taxation is a wild card," he said.

Some lawmakers, he said, would view the measure "as an example of the banking community whining. But this isn't whining. It's the first time in quite a while we've had this debate on credit unions, and we want to move it into the tax arena."

Joseph Bergeron, the president of the Vermont Credit Union League, said he would wait until March 9 - the day Mr. D'Elia and other supporters are scheduled to testify before the Vermont House's Commerce Committee - to comment on the banking industry's proposal. But he said his group would "object heavily" to any move to tax credit unions.

The pending bill is the first attempt in four decades to systematically revise Vermont's laws governing credit unions.

Mr. Bergeron said the changes it includes are similar to ones enacted last year by the National Credit Union Administration, which regulates federal credit unions. The aim is to establish parity between the state and federal statutes, he said.

"We want to see to it that Vermont institutions remain with the state charter," Mr. Bergeron said. (Thirty-two of its 38 credit unions are state-chartered.)

John McKechnie, the senior vice president for governmental affairs at the Credit Union National Association in Washington, said Mr. D'Elia's proposal is part of a "national effort" by banks to tax credit unions at the state level.

Bills will probably be introduced elsewhere before the legislative season ends, Mr. McKechnie said. Bank trade groups are "increasing their efforts to almost a zealous degree."

The idea of credit union taxation is getting some renewed attention in Congress too.

On Tuesday, House Ways and Means Committee Chairman Rep. Bill Thomas, R-Calif., said his panel would review the tax-exempt status of a number of organizations, including credit unions.

Unlike the income tax, which is levied on a portion of an institution's net earnings, the franchise tax is a levy on deposits. Vermont banks pay 0.0096% of their average monthly deposits; its state-chartered banks paid $6.2 million in franchise taxes last year.

Credit unions there would have paid $600,000 to $800,000 if they were subject to the tax, Mr. D'Elia said.

Vermont banks paid another $3.3 million last year in rooms-and-meals, sales, and use taxes, from which credit unions are also exempt.

The legislation would permit state-chartered credit unions to make business loans and liberalize their field-of-membership rules, Mr. D'Elia said. Bankers oppose it because "it would lead to a much larger pool of tax-free banking than we're willing to stand for."

His proposal would extend the franchise tax to credit unions with more than $10 million of assets. "We have no problems with the smaller credit unions that are still performing in line with their original missions," Mr. D'Elia said.

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