BILL NUMBER: AB 2490	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 26, 2016
	AMENDED IN ASSEMBLY  APRIL 11, 2016
	AMENDED IN ASSEMBLY  MARCH 17, 2016

INTRODUCED BY   Assembly Member Gatto

                        FEBRUARY 19, 2016

   An act to add Section 23714 to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2490, as amended, Gatto. Corporation Tax Law: exemption:
regulated investment company.
   Existing law, the Corporation Tax Law, generally conforms to the
federal income tax laws that apply to a regulated investment company
and further provides that for purposes of the Corporation Tax Law,
its "net income" is equal to its "investment company income."
Existing law exempts from tax under the Corporation Tax Law, various
organizations including credit unions, fraternal societies, social
welfare organizations, and labor organizations.
   This bill would  exempt from tax   provide
that  under the Corporation Tax Law, a regulated investment
company that is a mutual fund investment management company owned by
investors in the mutual funds that it  serves.  
serves is not subject to tax. The bill would authorize the Franchise
Tax Board to promulgate regulations as necessary or appropriate to
carry out this provision. 
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 23714 is added to the Revenue and Taxation
Code, to read:
   23714.   (a)    Notwithstanding any other law, a
regulated investment company, as defined in Section 851 of the
Internal Revenue Code, relating to definition of regulated investment
company, that is a mutual fund investment management company owned
by  the  investors  of   in the
 mutual  fund   funds  that it
 serves.   serves is exempt from the taxes
imposed by this part, except as provided in Article 2 (commencing
with Section 23731).  
   (b) The Franchise Tax Board may promulgate regulations as
necessary or appropriate to carry out the purposes of this section.

  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.