BILL NUMBER: SB 934	CHAPTERED  10/10/99

	CHAPTER   675
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 6, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 9, 1999
	PASSED THE SENATE   JUNE 1, 1999
	AMENDED IN SENATE   MAY 18, 1999
	AMENDED IN SENATE   APRIL 14, 1999

INTRODUCED BY   Senator Burton
   (Principal coauthor: Assembly Member Papan)
   (Coauthors: Senators Alpert, Brulte, Chesbro, Costa, Karnette, O'
Connell, Ortiz, Perata, Polanco, and Speier)
   (Coauthors: Assembly Members Baugh, Campbell, Honda, Leach,
Leonard, and Mazzoni)

                        FEBRUARY 25, 1999

   An act to add Section 23701y to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 934, Burton.  Taxation:  credit unions.
   Existing federal law exempts a federally chartered credit union
from all state and local taxation other than ad valorem property
taxes.
   The Bank and Corporation Tax Law imposes a franchise tax on
financial corporations, including state-chartered credit unions, but
provides that the tax is in lieu of all other state and local taxes
and licenses, with certain exceptions.  That law also exempts
specified classes of entities from the franchise and income taxes
imposed by that law, but does not exempt state-chartered credit
unions from those taxes.
   This bill would additionally exempt from those franchise and
income taxes any state-chartered credit union.  This bill would also
continue the exemption of state-chartered credit unions from all
other state and local taxes and licenses, with certain exceptions.
   This bill would take effect immediately as a tax levy.


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


  SECTION 1.  Section 23701y is added to the Revenue and Taxation
Code, to read:
   23701y.  A credit union as defined in Section 14002 of the
Financial Code.  In addition, those credit unions are exempt from all
other taxes and licenses, state, county, and municipal, imposed upon
those credit unions, except taxes upon their real property, local
utility user taxes, sales and use taxes, state energy resources
surcharges, state emergency telephone users surcharges, unrelated
business income taxes pursuant to Section 23731, motor vehicle and
other vehicle registration license fees, and any other tax or license
fee imposed by the state upon vehicles, motor vehicles, or the
operation thereof.
  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.