3928

JOINT RESOLUTIONS

study of the cash flow and investment return on
local income taxes collected and invested by the
State.

WHEREAS, The State of Maryland provides a valuable
service to its political subdivisions by collecting local
income taxes for those political subdivisions; and

WHEREAS, However, while the State distributes the
local income tax funds back to the subdivisions, it does
not distribute the interest the State earns by investment
of such funds; and

WHEREAS, Moreover, State law makes no provision for
the payment of interest earned on the investing of local
income tax funds to the subdivisions; and

WHEREAS, A detailed study of the cash flow of local
income taxes from the State Income Tax Division to the
Office of the State Treasurer, and the relationship of
such cash flow to the interest earned on investments
thereof is necessary to determine the precise costs
involved and to properly allocate the costs and the
benefits of this cash flow in the best interests of the
State; now, therefore, be it

RESOLVED BY THE GENERAL ASSEMBLY OF MARYLAND, That
the Joint Committee on the Management of Public Funds, in
conjunction with the Office of the Comptroller of the
Treasury and the Office of the State Treasurer, is
directed to undertake a review of the methods of
collecting, investing and distributing the local income
tax imposed by the subdivisions, for purposes of (1)
determining whether and to what extent the investment
return on these taxes should be returned to the
subdivisions and (2) studying the cash flow from the
State Income Tax Division through the State Treasurer's
Office and the relationship of such cash flow to the
interest earned on investments; and be it further

RESOLVED, That this study shall include the
formulation of alternative formulae for estimating
investment return on the local income tax funds, taking
into account such factors as the service provided by the
State, the rate of investment return, the rate and method
of collection, and possible alternatives to the quarterly
local income tax distribution system; and be it further

RESOLVED, That the Joint Committee on the Management
of Public Funds submit its findings and recommendations,
including any proposed legislation, no later than 15 days
after the first day of the 1976 Regular Session of the
General Assembly; and be it further