(7) The appropriate treatment of self-generated electricity under the
State and local tax structure, including the effect of self-generation on public service
company franchise tax and local energy tax revenues and the effectiveness of the
special use tax on electricity under this Act in preventing leakage from the public
service company franchise tax from self-generated electricity; and

(8) The effect of the 50% personal property tax exemption on the
competitiveness of Maryland-based electric generation.

SECTION 5. 7. AND BE IT FURTHER ENACTED, That, except as provided in
Sections 3 and 4 of this Act, this Act shall take effect July 1, 1999.

Approved April 8, 1999.

CHAPTER 6
(House Bill 366)

AN ACT concerning

Electric and Gas Utility Tax Reform

FOR the purpose of altering the public service company franchise tax for a public
service company engaged in an electric or gas business in the State; altering the
definition of gross receipts subject to the tax for a public service company
engaged in an electric or gas business in the State; altering the definition of a
public service company for purposes of the public service company franchise tax;
imposing a tax on certain public service companies based on kilowatt hours of
electricity or dekatherms therms of natural gas delivered; setting the rate of the
tax; allowing a public service company to surcharge its customers for certain tax
imposed; providing a credit against the public service company franchise tax in
a certain amount for certain kilowatt hours of electricity delivered to certain
customers for certain uses in excess of certain amounts; providing a credit
against the tax for certain tax imposed for dekatherms therms of natural gas
delivered to certain customers for certain uses or delivered to certain customers
who receive the natural gas on a certain basis; providing an addition
modification under the corporate income tax in the amount of certain credits;
repealing a certain subtraction modification under the income tax for gross
receipts derived by a public service company; providing certain modifications
under the income tax for the purposes of determining Maryland modified income
of a public service company engaged in an electric or gas business in the State;
providing a credit against the corporate income tax for certain property taxes
paid on certain operating real property used to generate electricity for sale;
providing a credit against the corporate income tax for certain wages paid by
certain multijurisdictional electric companies at certain corporate or regional
headquarters in the State; imposing a special use tax on certain electricity used
in the State but not delivered by a public service company, to be administered by
the Comptroller under the sales and use tax; requiring the Comptroller to adopt
certain regulations; clarifying the definition of "production activity" under the