In this subtitle the following words have the meanings indicated. “Delivered for final consumption” means delivered by a public service company in its service area as measured at the customer meter or other point of final delivery. “Gross receipts” means total operating revenue. “Gross receipts” includes: gross or total earnings and total receipts; for a telephone company, the full amount of approved and applicable federal and State tariff charges for telephone lifeline service without the discount provided by § 8–201(d) of the Public Utilities Article; and for a telecommunications company providing interstate long distance telecommunications service, the gross charges from the sale of long distance telecommunications service that originates or terminates in the State and for which a charge is made to a service address located in the State, regardless of where the amount is billed or paid. “Gross receipts” does not include: any revenue that a public service company derives from an activity other than an electric, gas, or telephone business; or net uncollectible revenue. For a public service company engaged in a telephone business in the State, gross receipts does not include: gross charges from the sale by the public service company to another public service company subject to the tax imposed by this subtitle of a service or product for resale; gross charges from the sale by the public service company of Internet access service by which a connection is provided between a computer and the Internet; or gross charges from the sale of telecommunications service obtained by using a prepaid telephone calling arrangement, as defined in § 11–101 of this article. For a public service company engaged in the transmission, distribution, or delivery of electricity or gas in the State: “gross receipts” includes: except as provided in item (ii)2 and 3 of this paragraph, gross charges for the transmission, distribution, or delivery of electricity or natural gas or for distribution or delivery–related services; and competitive transition charges, intangible transition charges, and any other surcharge or other cost–recovery mechanism authorized for recovery of transition costs or the costs of demand side management or other energy conservation programs, universal service or other public purpose programs, or consumer education programs; and “gross receipts” does not include: gross charges from the sale of electricity or natural gas; gross charges from the transmission, distribution, or delivery of electricity or natural gas to another public service company subject to the tax imposed under § 8–402 of this subtitle if the buyer intends to resell the electricity or natural gas; or gross charges from an interstate transmission network or from the transmission, distribution, or delivery of electricity or natural gas to a customer located in another state. “Long distance telecommunications service” means telecommunications service for a telecommunication that does not originate and terminate in the same local calling area. “Production activity” has the meaning stated in § 11–101 of this article. “Public service company” means a person: engaged in a telephone business in the State; or engaged in the transmission, distribution, or delivery of electricity or natural gas in the State.

A franchise tax, measured by gross receipts, is imposed, for each calendar year, on each public service company: engaged in a telephone business in the State; or engaged in the transmission, distribution, or delivery of electricity or natural gas in the State. The tax imposed under subsection (a) of this section does not apply to a public service company that is: a county; a municipal corporation; a nonprofit electric cooperative; or a public–private partnership formed for the generation of clean or renewable energy if: 30% or more of the electricity generated through the public–private partnership is purchased by the public partner; and the clean or renewable energy generating station is sited on an eligible clean and renewable energy generation site as determined by the Department of the Environment, including: rooftops; parking lots; landfills; brownfields sites; voluntary cleanup program sites; reclaimed mines; Superfund sites; and sediment or retention ponds. The Department of the Environment may adopt regulations regarding the determination of eligible clean or renewable energy generation sites under subsection (b)(4) of this section.

In addition to any tax imposed under § 8-402 of this subtitle, a franchise tax is imposed for each calendar year on each public service company engaged in the transmission, distribution, or delivery of electricity or natural gas in the State. The tax imposed under this section is measured by kilowatt hours of electricity or therms of natural gas delivered by the public service company for final consumption in the State. The tax imposed under subsection (a) of this section does not apply to therms of natural gas delivered for final consumption by a public service company that is: a county; or a municipal corporation.

The rate of the franchise tax imposed under § 8-402 of this subtitle is 2% of gross receipts derived from business in the State. The rate of the tax imposed under § 8-402.1 of this subtitle is: 062 cents for each kilowatt hour of electricity delivered by the public service company for final consumption in the State; and 402 cents for each therm of natural gas delivered by the public service company for final consumption in the State.

Each public service company that, in a calendar year, has gross receipts derived from business in the State or delivers electricity or natural gas for final consumption in the State shall complete, under oath, and file with the Department a public service company franchise tax return, on or before April 15th of the next year. Each public service company that reasonably expects its public service company franchise tax for a year to exceed $1,000 shall complete, under oath, and file with the Department a declaration of estimated tax, on or before April 15 of that year. A public service company required under paragraph (1) of this subsection to file a declaration of estimated tax for a taxable year shall complete and file with the Department a quarterly estimated tax return on or before June 15, September 15, and December 15 of that year. A public service company shall file with the return an attachment that states any information that the Department requires to determine gross receipts derived from business in the State or kilowatt hours or therms of natural gas delivered for final consumption in the State.

Except as provided in subsection (b) of this section, each public service company shall pay the public service company franchise tax with the return that covers the period for which the tax is due. A public service company required to file estimated public service company franchise tax returns under § 8-404(b) of this subtitle shall pay: at least 25% of the estimated public service company franchise tax shown on the declaration or amended declaration for a taxable year: with the declaration or amended declaration that covers the year; and with each quarterly return for that year; and any unpaid public service company franchise tax for the year shown on the public service company franchise tax return that covers that year, with the return.

A public service company may claim a credit against the public service company franchise tax equal to the estimated tax paid under § 8-405(b) of this subtitle. Subject to the limitations of this subsection, a public service company, including any multijurisdictional public service company, may claim a credit against the public service company franchise tax in the amount of $3 for each ton of Maryland–mined coal that the public service company purchased in the calendar year. The credit under this subsection may not be claimed for Maryland–mined coal purchased in a calendar year beginning after December 31, 2020. This paragraph applies only to credits claimed under this subsection for calendar years beginning on or after January 1, 2007. The amount claimed as a credit under this subsection may not exceed the amount approved by the Department under this paragraph. By January 15 of the calendar year following the end of the calendar year in which the Maryland–mined coal was purchased, a public service company, or a cogenerator or electricity supplier as defined in § 10–704.1 of this article, shall submit an application to the Department for approval of the credit allowed under this paragraph. Subject to subparagraph (vi) of this paragraph, the total amount of credits approved by the Department under this paragraph for any calendar year may not exceed: $4,500,000 for a calendar year beginning after December 31, 2008, but before January 1, 2013; $6,000,000 for a calendar year beginning after December 31, 2012, but before January 1, 2015; or $3,000,000 for a calendar year beginning after December 31, 2014, but before January 1, 2021. Subject to subparagraph (vi) of this paragraph, if the total amount of credits applied for in any calendar year under this paragraph exceeds the maximum specified under subparagraph (iv) of this paragraph, the Department shall approve a credit under this paragraph for each applicant in an amount equal to the product of multiplying the credit applied for by the applicant times a fraction: the numerator of which is the maximum specified under subparagraph (iv) of this paragraph; and the denominator of which is the total of all credits applied for by all applicants under this paragraph for the calendar year. Of the total credits approved for any calendar year beginning after December 31, 2006, but before January 1, 2021, the Department shall reserve $2,250,000 of the credits for purchases of Maryland–mined coal that will be used by a facility in Maryland. If the total amount of credits applied for by all applicants for any calendar year for the purchase of Maryland–mined coal that will be used in Maryland exceeds $2,250,000, the Department shall approve a credit under this paragraph for each applicant in an amount equal to the product of multiplying the credit applied for by the applicant times a fraction: the numerator of which is $2,250,000; and the denominator of which is the total of all credits applied for by all applicants under this paragraph for the calendar year for the purchase of Maryland–mined coal that will be used in Maryland. On or before February 15 of the calendar year following the end of the calendar year in which the Maryland–mined coal was purchased, the Department shall certify to each applicant claiming a credit the amount of the tax credits approved by the Department for that applicant under this paragraph. To prevent actual multiple taxation of the sale of interstate long distance telecommunications service, a long distance telecommunications company, upon proof that it has paid a properly due excise, sales and use, or gross receipts tax in another state on a sale the gross receipts from which are subject to taxation under this subtitle, shall be allowed a credit against the public service company franchise tax for the amount paid. The credit permitted under this subsection may not exceed the tax imposed under this subtitle.

A telephone company may claim a credit against the public service company franchise tax equal to all approved and applicable federal and State tariff charges for telephone lifeline service not billed to eligible subscribers as provided in § 8–201 of the Public Utilities Article.

The Department shall: administer the laws that relate to the public service company franchise tax; adopt reasonable regulations to administer the provisions of laws that relate to the public service company franchise tax; design the returns and forms that, on completion, provide the information required for the administration of the public service company franchise tax laws; collect the public service company franchise tax revenue, including penalties and interest; pay that revenue into the General Fund of the State; and certify to the Comptroller that revenue.

The public service company franchise tax with respect to gross receipts from telecommunications service shall be added to and disclosed as an element of the public service company’s charge to the customer for the service. A public service company may surcharge its customers for the public service company franchise tax imposed under § 8-402.1 of this subtitle.

A public service company may claim a credit against the public service company franchise tax for wages paid to qualified employees as provided under Title 6, Subtitle 3 of the Economic Development Article.

A public service company may claim a credit against the public service company franchise tax for neighborhood and community assistance as provided under § 6-404 of the Housing and Community Development Article.

A public service company may claim a credit against the public service company franchise tax for: wages paid to a qualified employee with a disability; and child care provided or paid for by a business entity for the children of a qualified employee with a disability as provided under § 21–309 of the Education Article; or transportation provided or paid for by the business entity for a qualified employee with a disability as provided under § 21–309 of the Education Article.

A public service company may claim a credit against the public service company franchise tax for employer-provided long-term care insurance as provided under § 10-710 of this article.

A public service company may claim a credit against the public service company franchise tax in an amount equal to: 002 cents for each kilowatt hour of electricity in excess of 500 million up to 1,500 million kilowatt hours during a calendar year delivered for final consumption to a single industrial customer for use in a production activity at the same location in the State; and 0455 cents for each kilowatt hour of electricity in excess of 1,500 million kilowatt hours during a calendar year delivered for final consumption to a single industrial customer for use in a production activity at the same location in the State. A public service company may claim a credit against the public service company franchise tax in an amount equal to the tax imposed for each therm of natural gas delivered for final consumption in the State to an industrial customer for use in a production activity in the State. The Public Service Commission shall require that the credits allowed under this section are passed through to the customers to whom the electricity or natural gas on which the credits are based is delivered.