BILL NUMBER: SB 1517	CHAPTERED  07/10/00

	CHAPTER   112
	FILED WITH SECRETARY OF STATE   JULY 10, 2000
	APPROVED BY GOVERNOR   JULY 7, 2000
	PASSED THE ASSEMBLY   JUNE 26, 2000
	PASSED THE SENATE   APRIL 27, 2000
	AMENDED IN SENATE   MARCH 29, 2000

INTRODUCED BY   Senator Brulte

                        FEBRUARY 17, 2000

   An act to amend Section  504 of the Corporations Code, relating to
corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1517, Brulte.  Corporations:  distributions to shareholders:
real estate investment trusts.
   Existing law specifies the conditions under which, in general, a
corporation and any of its subsidiaries may distribute to
shareholders cash or property without consideration, whether by way
of dividend or otherwise.
   This bill would exempt from those provisions a dividend declared
by a real estate investment trust, as defined in federal tax law, to
the extent that the dividend is necessary to maintain the status of
the corporation as a real estate investment trust under federal tax
law.


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


  SECTION 1.  Section 504 of the Corporations Code is amended to
read:
   504.  (a) The provisions of Section 500 do not apply to a dividend
declared by either of the following:
   (1) A regulated investment company, as defined in the federal
Internal Revenue Code, as amended, to the extent that the dividend is
necessary to maintain the status of the corporation as a regulated
investment company under the provisions of that code.
   (2) A real estate investment trust, as defined in Part II of
Subchapter M of Chapter 1 of Subtitle A of the federal Internal
Revenue Code, as amended, to the extent that the dividend is
necessary to maintain the status of the corporation as a real estate
investment trust under the provisions of that code.
   (b) The provisions of this chapter do not apply to any purchase or
redemption of shares redeemable at the option of the holder by a
registered open-end investment company under the United States
Investment Company Act of 1940, so long as the right of redemption
remains unsuspended under the provisions of that statute and the
articles and bylaws of the corporation.