In this subtitle the following words have the meanings indicated. “Corporation” has the meaning stated in § 10-101 of this article. “County income tax” has the meaning stated in § 10-101 of this article. “Individual” has the meaning stated in § 10-101 of this article. “State income tax” has the meaning stated in § 10-101 of this article.

From the income tax revenue from individuals, the Comptroller shall distribute the amount necessary to pay refunds relating to income tax from individuals to the income tax refund account.

After making the distribution required under § 2-604 of this subtitle, from the remaining income tax revenue from individuals, the Comptroller shall distribute the cost of administering the income tax laws to an administrative cost account. The Comptroller shall include within the distribution required under this section the amount necessary for the counties’ share of the cost of administering the income tax laws. The share of administrative costs for each county is the amount equal to the product of multiplying the cost of administering the income tax laws by a fraction: the numerator of which is the amount of county income tax from individuals collected and attributable to residents of the county; and the denominator of which is the total amount of income tax collected from individuals and corporations.

After making the distributions required under §§ 2–604 and 2–605 of this subtitle, on or before June 30, 2019, the Comptroller shall distribute $200,000,000 of the income tax revenue from individuals to the Blueprint for Maryland’s Future Fund established under § 5–206 of the Education Article. After making the distributions required under §§ 2–604 and 2–605 of this subtitle, on or before June 30, 2023, the Comptroller shall distribute $800,000,000 of the income tax revenue from individuals to the Blueprint for Maryland’s Future Fund established under § 5–206 of the Education Article.

After making the distributions required under §§ 2–604 and 2–605 of this subtitle, on or before June 30, 2022, the Comptroller shall distribute $30,000,000 of the income tax revenue from individuals to the Rental Housing Fund established under § 4–504 of the Housing and Community Development Article.

After making the distributions required under §§ 2–604, 2–605, 2–605.1, and 2–605.2 of this subtitle, from the remaining income tax revenue from individuals, the Comptroller shall distribute 37.5% of the income tax revenue attributable to the tax imposed under § 10–105(a)(3) of this article to the Transportation Trust Fund.

After making the distributions required under §§ 2–604 through 2–605.3 of this subtitle, from the remaining income tax revenue from individuals, the Comptroller shall distribute to an unallocated individual revenue account the income tax revenue: with respect to which an income tax return is not filed; and that is attributable to: income tax withheld from salary, wages, or other compensation for personal services under Title 10 of this article; or estimated income tax payments by individuals. In June of each year, from current collections, the Comptroller shall reserve an amount of unallocated revenue that the Comptroller estimates will be claimed on returns and refunded to taxpayers within 3 years of the date the income tax return was due to be filed, and distribute to each county, municipal corporation, and special taxing district a pro rata share of the balance of the unallocated individual income tax revenue. The Comptroller shall adjust the amount distributed under paragraph (1) of this subsection to a county, municipal corporation, or special taxing district to allow for the proportionate part of tax claim payments for a prior calendar year made after a distribution is made to the county, municipal corporation, or special taxing district for that year. To compute the pro rata share for a county, the Comptroller shall: compute the amount equal to the product of multiplying the unallocated individual income tax revenue by a fraction: the numerator of which is the income tax for the county collected for a calendar year; and the denominator of which is the total income tax from individuals collected for that year; and reduce the amount computed under item (i) of this paragraph by the pro rata share computed under paragraph (2) of this subsection for municipal corporations and special taxing districts that are located in the county. To compute the pro rata share for a municipal corporation or special taxing district, the Comptroller shall compute the amount equal to the product of multiplying the pro rata share for a calendar year for the county where the municipal corporation or district is located by a fraction: the numerator of which is the amount distributed under § 2–607 of this subtitle to that municipal corporation or special taxing district for that year; and the denominator of which is the total income tax for that county collected for that year. On or before June 30, 2009, the Comptroller shall distribute $366,778,631 from the Local Reserve Account established to comply with this section to the General Fund of the State. On or before June 30, 2010, the Comptroller shall distribute $350,000,000 from the Local Reserve Account established to comply with this section to the Education Trust Fund established under § 9–1A–30 of the State Government Article. On or before June 30, 2011, the Comptroller shall distribute $200,000,000 from the Local Reserve Account established to comply with this section to the General Fund of the State for use in funding the Maryland Medicaid Program for fiscal year 2011. On or before June 30, 2013, the Comptroller shall distribute $15,379,979 from the Local Reserve Account established to comply with this section to a special fund established in the Department of Transportation for the purpose of providing transportation grants to municipalities. The grants authorized under this subsection shall be allocated to eligible municipalities as provided in § 8–405 of the Transportation Article. On or before June 30, 2025, the Comptroller shall distribute $230,000,000 from the Local Reserve Account established to comply with this section to the General Fund of the State. On or before June 30, 2026, the Comptroller shall distribute $40,567,430 from the Local Reserve Account established to comply with this section to the General Fund of the State. On or before June 1, 2026, the Comptroller shall distribute $37,300,000 from the Local Reserve Account established to comply with this section to the General Fund of the State. The Maryland Department of Labor shall reimburse the Local Reserve Account $37,300,000 within 2 years after contributions into the Department’s Family and Medical Leave Insurance Fund begin. In each of fiscal years 2026 through 2060, in addition to the amounts distributed under subsection (b) of this section, the Comptroller shall distribute $10,000,000 of the remaining income tax revenue from individuals to the Local Reserve Account established to comply with this section to repay the $350,000,000 transfer to the Education Trust Fund required under subsection (e) of this section. For fiscal years 2024 through 2043, in addition to the amounts distributed under subsections (b) and (j) of this section, the Comptroller shall distribute $10,000,000 of the remaining income tax revenue from individuals to the Local Reserve Account established to comply with this section. For fiscal years 2029 through 2038, in addition to the amounts distributed under subsections (b), (j), and (k) of this section, the Comptroller shall distribute $27,056,743 of the remaining income tax revenue from individuals to the Local Reserve Account established to comply with this section to repay the $270,567,430 transfer to the General Fund of the State required under subsection (h) of this section.

After making the distributions required under §§ 2-604 through 2-606 of this subtitle, from the remaining income tax revenue from individuals, the Comptroller shall distribute to each special taxing district that received an income tax revenue distribution in fiscal year 1977 and to each municipal corporation an amount that, based on the certification of the Comptroller as to State income tax liability and county income tax liability of the residents of the district or municipal corporation, equals the greater of: subject to subsection (b) of this section, 17% of the county income tax liability of those residents; or 37% of the Maryland taxable income of those residents. If the county income tax rate for a county is less than 2.6%, the amount determined under subsection (a)(1) of this section shall be multiplied by a fraction: the numerator of which is 2.6%; and the denominator of which is the county income tax rate for the county. The Comptroller shall adjust the amount distributed under subsection (a) of this section to a municipal corporation or special taxing district to allow for a proportionate part of refund and interest payments for a prior calendar year made after a distribution is made to the municipal corporation or district for that year.

After making the distributions required under §§ 2–604 through 2–607 of this subtitle, if it is determined that a county has not met the local funding requirements for education under § 5–202(d) of the Education Article, the Comptroller shall distribute to the county board of education an amount equal to the amount calculated under § 5–213 or § 5–213.1 of the Education Article. After making the distributions required under §§ 2–604 through 2–607 of this subtitle and paragraph (1) of this subsection, the Comptroller shall distribute to each county the remaining income tax revenue from individuals attributable to the county income tax for that county. The Comptroller shall adjust the amount distributed under subsection (a) of this section to a county to allow for a proportionate part of refund and interest payments made for a prior calendar year after a distribution is made to the county for that year.

After making the distributions required under §§ 2–604 through 2–608 of this subtitle, and after making the distributions required under §§ 7–329 and 7–330 of the State Finance and Procurement Article, the Comptroller shall distribute the remaining income tax revenue from individuals to the General Fund of the State.

The Comptroller shall make the distributions of income tax revenue from individuals attributable to county income tax periodically to a county, municipal corporation, or special taxing district. The periodic distributions of the estimated amount to which each county, municipal corporation, and special taxing district is entitled from withholdings and estimated income taxes paid shall be made: for the 1st 3 quarters of the State’s fiscal year, as often as practicable but at least each quarter; and for the 4th quarter of that year: before the last day of that year, for the months of April and May; and before August 31, for the month of June. Abrogated.

In this section, “account” means the Local Reserve Account established to comply with § 2–606 of this subtitle. This section applies to a county or municipal corporation that receives an overpayment or underpayment of local income tax revenue from the Comptroller. After reviewing income tax revenue distributions to a county or municipal corporation, if the Comptroller determines that the county or municipal corporation received an underpayment of income tax, the Comptroller shall initially pay the amount due to the county or municipal corporation from the account. After reviewing income tax revenue distributions to a county or municipal corporation, if the Comptroller determines that the county or municipal corporation received an overpayment of income tax, the Comptroller may not require the county or municipal corporation to reimburse the account for its share of the overpayment. A determination by the Comptroller under this section that a county or municipal corporation received an underpayment or overpayment of income tax shall be based on a full accounting of income tax returns for the taxable year for which the county or municipal corporation received the underpayment or overpayment.

From the income tax revenue from corporations, the Comptroller shall distribute the amount necessary to pay refunds relating to income tax from corporations to the income tax refund account.

After making the distribution required under § 2–613 of this subtitle, of the remaining income tax revenue from corporations, the Comptroller shall distribute: 6% to the Higher Education Investment Fund established under § 15–106.6 of the Education Article; and 15% to the General Fund.

Except as provided in paragraph (2) of this subsection, after making the distributions required under §§ 2–613 and 2–613.1 of this subtitle, the Comptroller shall distribute monthly 20% of the remaining income tax revenue from corporations to a special fund to be distributed as provided in subsection (b) of this section. The percent of the remaining income tax revenue from corporations distributed to a special fund to be distributed as provided in subsection (b) of this section shall be: 2% for the fiscal year beginning July 1, 2022; 20% for the fiscal year beginning July 1, 2023; 21% for the fiscal year beginning July 1, 2024; and 22% for each fiscal year beginning on or after July 1, 2025, but before July 1, 2027. Except as provided in subparagraph (ii) of this paragraph, from the special fund, the Comptroller shall distribute an amount equal to 20% of the cost to administer the income tax on corporations to an administrative cost account. The percent of the cost to administer the income tax on corporations that is distributed to an administrative cost account shall be: 2% for the fiscal year beginning July 1, 2022; 20% for the fiscal year beginning July 1, 2023; 21% for the fiscal year beginning July 1, 2024; and 22% for each fiscal year beginning on or after July 1, 2025, but before July 1, 2027. After making the distribution required under paragraph (1) of this subsection, the Comptroller shall distribute the balance in the special fund to the Gasoline and Motor Vehicle Revenue Account in the Transportation Trust Fund.

In this section, “qualified data center” has the meaning stated in § 11–239 of this article. After making the distributions required under §§ 2–613, 2–613.1, and 2–614 of this subtitle, the Comptroller shall distribute 15% of the remaining income tax revenue from corporations that is attributable to qualified data centers that are operational on or after January 1, 2026, to the Strategic Energy Investment Fund established under § 9–20B–05 of the State Government Article.

After making the distributions required under §§ 2–613, 2–613.1, 2–614, and 2–614.1 of this subtitle, the Comptroller shall distribute the remaining income tax revenue from corporations to the General Fund of the State.