764                             LAWS OF MARYLAND                       CH. 452

the lesser of a prescribed minimum or of an amount calculated as
the difference between the revenue equivalent to a specified levy and
revenue of the subdivision in fiscal 1967-68 from taxation of shares
of stock of financial institutions; correcting a cross-reference to in-
come tax provisions in determining net earnings of savings banks
and building, savings and loan associations; establishing as a
special tax and providing generally for a franchise tax on net
earnings of financial institutions, including determination of net
earnings, rate of tax, reporting requirements, penalties, civil col-
lection and enforcement procedures, administration, and powers
and duties of the Director of the State Department of Assess-
ments and Taxation with respect to said franchise tax; replacing
the schedule of rates of gross receipts tax on railroads by a flat
rate of said tax; eliminating the gross receipts tax on safe deposit
and trust companies; enabling every subdivision to fix the rate
of recordation tax applicable therein; requiring every county and
Baltimore City to levy an income tax at a rate sufficient to service
obligations under school construction loans, imposing duties on
the Comptroller of the Treasury in connection therewith and pro-
viding generally therefor; eliminating the provision for subtrac-
tion of certain dividends in arriving at taxable net income of
individuals; providing a permanent formula for computation of
income tax by taxpayers whose taxable year includes the effective
date of a rate change or repeal; increasing the basic rate of tax
on net income of corporations; exempting finance companies from
corporate income tax and conforming the exemption for banks to
the definitions for the franchise tax on net earnings of financial
institutions; TO PROVIDE A CREDIT AGAINST INCOME TAX
FOR PERSONAL PROPERTY TAXES FOR STATE TAXA-
TION ONLY; including sale or charges for telecommunication mes-
sages or services in the definition of "sale at retail" for sales tax
purposes; exempting such sales or charges from sales tax subject
to automatic termination of the exemption upon elimination or
reduction of Federal excise tax on such sales or charges; exempt-
ing certain property destroyed or incorporated in research and
development from sales and use tax; reducing the rate of sales
and use tax on manufacturing machinery and equipment; provid-
ing that exemption from sales or use tax of sales to the State
or its subdivisions shall not be construed to exempt certain sales
to contractors; exempting sales to financial institutions from sales
and use tax to the extent and so long as federal law requires sales
to national banks to be so exempted; declaring the provisions of
the act to be severable; and preserving all liabilities for taxes
accrued prior to the effective date of the act or provisions thereof.

Section 1. Be it enacted by the General Assembly of Maryland,
That Sections 36 and 37 of Article 15A, Annotated Code of Mary-
land (1967 Supplement), title "Budget and Procurement," subtitle
"State Aid for Police Protection Fund," be and they are hereby
repealed, and new Sections 36 and 37 enacted in lieu thereof, to stand
in the place of the sections repealed, respectively; and that new
Section 39 be and it is hereby added to said Article, title, and sub-
title, to follow immediately after Section 38 thereof, and all to read
as follows:

86.

The State Aid for Police Protection Fund is a continuing grant,