# COMAR Title 18 — Department of Assessments and Taxation

## Subtitle 10 — Public Utility Operating Property

### Chapter 01 — Classification

**Authority:** Tax-Property Article, §§1-101(y) and (ee), 2-201, and 8-109(h), Annotated Code of Maryland

**Administrative History:** Effective date: January 26, 1998 (25:2 Md. R. 79)

**Administrative History:** Regulation .01 amended effective May 29, 2000 (27:10 Md. R. 968); October 2, 2000 (27:18 Md. R. 1729)

**Administrative History:** Regulation .01A, B amended effective December 6, 2018 (45:24 Md. R. 1162)

**Administrative History:** Regulation .02 repealed effective May 29, 2000 (27:10 Md. R. 968)

#### Regulation .01 Procedure.

*COMAR 18.10.01.01*

A. In this regulation, “operating unit” has the meaning stated in Tax-Property Article, §1-101(y), Annotated Code of Maryland.

B. The Department considers the criteria in Tax-Property Article, §§1-101(ee) and 8-109(h), Annotated Code of Maryland, in determining whether a company should be classified as a public utility for property tax assessment purposes. A company that does not fully meet all of the criteria may still be classified as a public utility if the Department determines that the company predominantly meets the criteria.

C. The classification of property as public utility operating property will generally be determined by the ownership and use of the property as of January 1 preceding the taxable year.

D. If all personal property of a public utility operating unit is transferred between a utility and a nonutility entity on or after January 1, but before July 1, and is reported to the Department, then all of the transferred real and personal property will be reclassified and assessed to the transferee for the taxable year following the transfer. The report shall be filed under oath by the transferor or transferee with the Department by October 1 following the transfer, and include the following information:

  (1) A description of the property transferred;

  (2) The date and manner of transfer;

  (3) The name and address of the transferee;

  (4) The consideration, including separate allocation of consideration to real and personal property; and

  (5) Any other information that the Department requires.

E. If a public utility operating unit transfers less than all of its personal property after January 1, but before July 1, and the transfer includes real property, then for the taxable year following the transfer the:

  (1) Personal property will be assessed to the transferor;

  (2) Real property will be assessed to the transferee; and

  (3) Transferor must file a report with the Department within 30 days of the transfer including the information listed in §D of this regulation.

F. The Department may require nonutility entities to annually file reports of real and personal property used to generate electricity, and consider cost, income, and sales comparison indicators of value in valuing the property.

G. In determining the classification of utility operating property, multiple entities under commonly controlled management will generally be included in one public utility operating unit if an unregulated entity is receiving significant revenue or using a significant portion of its real and personal property in providing goods or services to the public utility.

### Chapter 02 — Allocation

**Authority:** Tax-Property Article, §§2-201 and 8-109, Annotated Code of Maryland

**Administrative History:** Effective date: July 22, 1991 (18:14 Md. R. 1610)

**Administrative History:** Chapter recodified from COMAR 18.10.01 to COMAR 18.10.02 effective January 26, 1998 (25:2 Md. R. 79)

#### Regulation .01 Definitions.

*COMAR 18.10.02.01*

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

  (1) “Property factors” means data that measure the physical presence of the operating unit within the State. Examples of property factors include such items as original property cost and depreciated property cost.

  (2) “Revenue factors” means data that measure the economic activity of the operating unit within the State. Examples of revenue factors include such items as gross revenue and net operating income.

  (3) “Use factors” means data that measure the physical activity of the operating unit within the State. Examples of use factors include such items as kilowatts sold or generated, therms sold, and barrel/miles.

#### Regulation .02 Allocation Factors.

*COMAR 18.10.02.02*

In allocating a portion of the operating unit to the State, the Department may use a combination of property, revenue, and use factors. The factors used shall be sufficient to produce a reasonable estimate of the unit value attributable to the State.

### Chapter 03 — Coal Pollution Facilities

**Authority:** Tax-Property Article, §§7-239(f) and 8-109, Annotated Code of Maryland

**Administrative History:** Effective date: June 2, 1997 (24:11 Md. R. 794)

**Administrative History:** Chapter recodified from COMAR 08.10.02 to COMAR 08.10.03 effective January 26, 1998 (25:2 Md. R. 79)

**Administrative History:** Regulation .01B amended effective December 6, 2018 (45:24 Md. R. 1162)

**Administrative History:** Regulation .03 amended effective December 6, 2018 (45:24 Md. R. 1162)

#### Regulation .01 Definitions.

*COMAR 18.10.03.01*

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

  (1) “Certified coal pollution control facility” has the meaning stated in Tax-Property Article, §7-239(a)(1), Annotated Code of Maryland.

  (2) “Coal Waste Disposal Power Project” has the meaning stated in Tax-Property Article, §7-239(a)(2), Annotated Code of Maryland.

  (3) “Depreciated value” means the original cost of property less its standard depreciation as determined by the Department under COMAR 18.03.01.02.

#### Regulation .02 Exemptions From Property Tax.

*COMAR 18.10.03.02*

A. Except as otherwise provided in this regulation, a partial exemption equal to 95 percent of the assessment of the property applies to property placed in service as part of a certified coal pollution control facility or a coal waste disposal power project and for which all necessary permits, including a certificate of public convenience and necessity, are issued after January 1, 1997.

B. If a certified coal pollution control facility produces a profitable by-product or if a part of the facility is required for the operation of the business without regard to State and federal air quality, water quality, and effluent requirements, the partial exemption under this regulation applies only to that portion of the value of the facility attributable to pollution control activity.

C. If a certified coal pollution facility engages in the replacement, repair, or retrofit of equipment that was subject to the property tax on or before December 31, 1996, the partial exemption under this regulation is reduced by the replacement value of existing equipment that is replaced, repaired, or retrofitted.

#### Regulation .03 Methods for Calculating the Exemption.

*COMAR 18.10.03.03*

A. Any exemption applied to property under Regulation .02B of this chapter is based on its depreciated value.

B. Any exemption applied to property under Regulation .02C of this chapter is based on the cost of replacement, repair, or retrofit of the equipment minus the depreciated value of the equipment replaced, repaired, or retrofitted.

C. Partial exemptions described in this chapter are calculated using standard depreciation as determined by the Department. Certified pollution control property is depreciated and subtracted from the depreciated cost of electric generation machinery and equipment. The taxable portion of the partial exemption (95 percent exempt; 5 percent taxable) is depreciated and added to the assessment.