1488                             Laws of Maryland                      [Ch. 698

strumentality of the United States and any other income to the extend
EXTENT includable in gross income for federal income tax purposes,
but exempt from State income taxes under the laws of the United
States; (2) to the extent included, undistributed corporate income
attributed to individuals from small business corporations, as defined
by Section 1371 of the Internal Revenue Code, as amended from
time to time, which elected to be taxed in accordance with the pro-
visions of subchapter "S" of the Internal Revenue Code; (3) pay-
ments 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 (4) for all taxable years
ending after December 31, 1966, amounts received by an individual
who has attained the age of 65 years before the close of the taxable
year, as an annuity, pension, or endowment under a private, munici-
pal, State or federal employee retirement system, and included in
such [individuals] individual's federal adjusted gross income,
this subtraction not to exceed [$1,200.00] two thousand, five hun-
dred dollars ($2,500.00) ONE THOUSAND FIVE HUNDRED
DOLLARS ($1,500.00) less the amount of old age, survivors, or
disability benefits received under the Social Security Act, the Rail-
road Retirement Act, or both, as the case may be; and (5) in the case
of persons retired prior to January 1, 1967, payments received which
represent 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 exceed the exclusion which was permitted under the laws
and regulations of this State prior to the year 1967; and (6) to the
extent included, the amount of any refunds of income taxes paid
to the State of Maryland, any other state, the District of Columbia,
and any political subdivision of the State of Maryland and of any
other state; and (7) to the extent included, distributions to bene-
ficiaries of accumulated income on which income tax has been paid
by a fiduciary to this State.

SEC. 2. AND BE IT FURTHER ENACTED, THAT THE PRO-
VISION OF THIS ACT SHALL TAKE EFFECT FOR ALL TAX-
ABLE YEARS ENDING AFTER DECEMBER 31, 1970.

SEC. 3 3. And be it further enacted, That this Act shall take effect
January 1, 1972.

Approved May 24, 1971.

CHAPTER 698
(House Bill 463)

AN ACT to repeal and re-enact, with amendments, Section 35(b)
of Article 77 of the Annotated Code of Maryland (1970 Supple-
ment), title "Public Education," subtitle "Chapter 4. County
Boards of Education," and to add new Section 36A to said article,
title and subtitle of the Code, to follow immediately after Section
36 thereof; reconstituting the county Board of Education for
Washington County, making it an elective Board, providing for