660                             LAWS OF MARYLAND                       CH. 438

CHAPTER 438
(Senate Bill 495)

AN ACT to repeal and re-enact, with amendments, Section 280 (c)
of Article 81 of the Annotated Code of Maryland (1967 Supple-
ment), title "Revenue and Taxes," subtitle "Income Tax," to pro-
vide that there shall be subtracted from federal adjusted gross
income to arrive at the taxable net income of an individual tax-
payer for Maryland income tax purposes payments received by
persons retired prior to a certain date which represent unrecovered
contributions to a retirement system and relating generally to the
amount of such payments to be subtracted on such State income
tax return.

Section 1. Be it enacted by the General Assembly of Maryland,
That Section 280 (c) of Article 81 of the Annotated Code of Mary-
land (1967 Supplement), title "Revenue and Taxes," subtitle "Income
Tax," be and it is hereby repealed and re-enacted, with amendments,
to read as follows:

280.

(c) There shall be subtracted from federal adjusted gross income:
(1) interest or dividends on obligations of the United States and
its territories and possessions or of any authority, commission or
instrumentality of the United States to the extent includable in gross
income for federal income tax purposes but exempt from State in-
come taxes under the laws of the United States; (2) dividends re-
ceived upon stock of national banks located within or without the
State and also domestic corporations the shares of which are subject
to ordinary taxes; (3) undistributed income received by individuals
from electing small business corporations, as defined in Section 1371
of the Internal Revenue Code, which have complied with the provi-
sions of subchapter, "S" of the Internal Revenue Code; [and] (4)
payments received by policemen and firemen from pension systems
for injuries or disabilities arising out of and in the course of their
employment as policemen or firemen [.]; and (5) in the case of per-
sons retired prior to January 1, 1967, payments received which repre-
sent unrecovered contributions to a retirement system over and above
any amount of such contributions remaining to be recovered tax-free
on the Federal return, limited to an amount which together with the
amount of any tax-free exclusion in the Federal return does not ex-
ceed the exclusion which was permitted under the laws and regula-
tions of this State prior to the year 1967.

Sec. 2. And be it further enacted, That this Act is hereby declared
to be an emergency measure and necessary for the immediate pres-
ervation of the public health and safety and having been passed
by a yea and nay vote supported by three-fifths of all the members
elected to each of the two houses of the General Assembly, the same
shall take effect from the date of its passage.

Approved April 19, 1968.