VETOES
AN ACT concerning

Credit Unions - Exemption from Taxation

FOR the purpose of generally exempting a credit union incorporated under the laws of
this State from State and local taxation to the same extent as a credit union
incorporated under the laws of the United States is exempt from federal taxation, with
certain exceptions; stating the intent of the General Assembly; and generally
relating to the tax-exempt status of credit unions incorporated under the laws of
the State.

BY repealing and reenacting, with amendments,
Article - Financial Institutions
Section 6-103

Annotated Code of Maryland
(1986 Replacement Volume and 1989 Supplement)

Preamble

WHEREAS, Federal law broadly exempts federally chartered credit unions from
State and local taxation, with certain exceptions; and

WHEREAS, Based upon the title of the Act that enacted the predecessor of §
6-103 of the Financial Institutions Article, the Court of Appeals, in Central Credit
Union of Maryland v. Comptroller of the Treasury, 243 Md. 175 (1966), narrowly
construed the provision of State law exempting State-chartered credit unions from
State and local taxation; and

WHEREAS, Based upon the Court of Appeals conclusion in Central Credit
Union of Maryland v. Comptroller of the Treasury, § 6-103 of the Financial Institutions
Article has been narrowly construed despite the literal language of that section that a
State-chartered credit union is exempt from all State and local taxation, with certain
exceptions; and

WHEREAS, It is the intent of the General Assembly by this Act to broadly
exempt State-chartered credit unions from State and local taxation, with certain
exceptions, so that federal credit unions and State credit unions will be provided similar
general exemptions from State and local taxation; now, therefore,

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Financial Institutions

6-103.

(A) [A] EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION,
A credit union incorporated under the laws of this State, its income, and its
PROPERTY, FRANCHISES, capital, reserves, surpluses, and other funds are exempt
from all taxes imposed by this State or by any of its political subdivisions TO THE
SAME EXTENT AS A CREDIT UNION INCORPORATED UNDER THE LAWS OF

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