PARRIS N. GLENDENING, Governor                          H.B. 1154

(C) THE EXEMPTION UNDER THIS SECTION DOES NOT APPLY TO ANY
PERSONAL PROPERTY THAT IS LEASED, LOANED, OR MADE AVAILABLE BY A BANK
OR TRUST COMPANY FOR THE USE OF A PERSON THAT IS NOT A BANK OR TRUST
COMPANY.

7-237.

(A) (1) IN THIS SECTION, "RESEARCH AND DEVELOPMENT" MEANS:

(I) BASIC AND APPLIED RESEARCH IN THE SCIENCES AND
ENGINEERING; AND

(II) THE DESIGN, DEVELOPMENT, AND GOVERNMENTALLY
REQUIRED PREMARKET TESTING OF PROTOTYPES, PRODUCTS, AND PROCESSES.

(2) "RESEARCH AND DEVELOPMENT' DOES NOT INCLUDE:

(I) MARKET RESEARCH;

(II)    RESEARCH IN THE SOCIAL SCIENCES OR PSYCHOLOGY AND
OTHER NONTECHNICAL ACTIVITIES;

(III)   ROUTINE PRODUCT TESTING;

(IV)   SALES SERVICES;

(V)    TECHNICAL AND NONTECHNICAL SERVICES; OR

(VI)   RESEARCH AND DEVELOPMENT OF A PUBLIC UTILITY.

(B) (1) FOR THE TAXABLE YEAR BEGINNING ON JULY 1, 1996, ALL
MACHINERY. EQUIPMENT, MATERIALS, AND SUPPLIES ARE SUBJECT TO A PARTIAL
EXEMPTION FROM PROPERTY TAX IF CONSUMED IN OR USED PRIMARILY IN
RESEARCH AND DEVELOPMENT.

(2) THE PARTIAL EXEMPTION GRANTED UNDER THIS SUBSECTION IS
EQUAL TO THE ASSESSMENT OF THE PROPERTY IN EXCESS OF 25% OF THE ORIGINAL
COST OF THE PROPERTY.

(C) FOR TAXABLE YEARS BEGINNING AFTER JUNE 30, 1997, ALL MACHINERY
EQUIPMENT, MATERIALS, AND SUPPLIES ARE NOT SUBJECT TO PROPERTY TAX IF
CONSUMED IN OR USED PRIMARILY IN RESEARCH AND DEVELOPMENT.

(B) (1) ALL MACHINERY, EQUIPMENT, MATERIALS, AND SUPPLIES ARE SUBJECT
TO A PARTIAL EXEMPTION FROM PROPERTY TAX IF CONSUMED IN OR USED PRIMARILY
IN RESEARCH AND DEVELOPMENT.

(2) THE PARTIAL EXEMPTION GRANTED UNDER THIS SUBSECTION:

(I) IS EQUAL TO THE ASSESSMENT OF THE PROPERTY IN EXCESS OF
50% OF THE ORIGINAL COST OF THE PROPERTY; AND

(II) SHALL APPLY ONLY TO PROPERTY PURCHASED OR TRANSFERRED
INTO THE STATE AFTER DECEMBER 31, 1994.

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