BILL NUMBER: AB 1784	CHAPTERED  09/24/00

	CHAPTER   618
	FILED WITH SECRETARY OF STATE   SEPTEMBER 24, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 23, 2000
	PASSED THE SENATE   AUGUST 29, 2000
	PASSED THE ASSEMBLY   AUGUST 28, 2000
	AMENDED IN SENATE   AUGUST 25, 2000
	AMENDED IN SENATE   JUNE 27, 2000

INTRODUCED BY   Assembly Members Lempert, Honda, Cunneen, and Rod
Pacheco
   (Coauthors:  Assembly Members Ashburn, Bock, Campbell, Cox,
Kaloogian, Knox, Machado, Olberg, Runner, Strickland, Strom-Martin,
Washington, and Zettel)
   (Coauthors:  Senators Johannessen, Poochigian, and Rainey)

                        JANUARY 26, 2000

   An act to amend Section 65004 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1784, Lempert.  Internet Tax Freedom Act:  continuation.
   The California Internet Tax Freedom Act prohibits, with specified
exceptions, the imposition, assessment, or attempt to collect (1) a
tax on Internet access, Online Computer Services, or the use of the
Internet or Online Computer Services, (2) a bit or bandwidth tax, or
(3) any discriminatory tax on Online Computer Services or Internet
access.  This act provides that it is to become inoperative on
January 1, 2002.
   This bill instead would provide that the act shall become
inoperative on January 1, 2005.
   This bill would provide that it would become operative only if AB
2412 of the 1999-2000 Regular Session is enacted and becomes
effective on or before January 1, 2001.


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


  SECTION 1.  Section 65004 of the Revenue and Taxation Code is
amended to read:
   65004.  (a) Except as provided in subdivision (b), no city,
county, or city and county may impose, assess, or attempt to collect
any of the following:
   (1) A tax on Internet access, Online Computer Services, or the use
of Internet access or any Online Computer Services.
   (2) A bit tax or bandwidth tax.
   (3) Any discriminatory tax on Online Computer Services or Internet
access.
   (b) The prohibition in subdivision (a) against the imposition of
taxes shall not apply to any new or existing tax of general
application, including, but not limited to, any sales and use tax,
business license tax, or utility user tax that is imposed or assessed
in a uniform and nondiscriminatory manner without regard to whether
the activities or transactions taxed are conducted through the use of
the Internet, Internet access, or Online Computer Services.
   (c) A cable television franchise fee may not be imposed on Online
Computer Services or Internet access delivered over a cable
television system if the Federal Communications Commission, by
issuing final order, or a court of competent jurisdiction, by
rendering a judgment enforceable in California, finds that those are
not cable services as defined in Section 522(6) of Title 47 of the
United States Code and are, therefore, not subject to a franchise
fee.  However, if that final order or judgment is overturned or
modified by further administrative, legislative, or judicial action,
that action shall control.  The operation of this subdivision may be
suspended by contract between a cable television franchising
authority and a cable television operator.
   (d) This part shall become inoperative on January 1, 2005.
  SEC. 2.  This bill shall become operative only if Assembly Bill
2412 is enacted and becomes effective on or before January 1, 2001.